In Transparency Games, I discuss a survey by the law firm of Labaton Sucharow.  It found the more Wall Street bankers are paid, the more willing they are to engage in illegal activity or look the other way when illegal activities were being engaged in.  The NY Times Andrew Ross-Sorkin wrote about an expanded update to this survey which confirmed these findings.

First, the survey found that regulators and all the new complex regulations they have added since the beginning of the financial crisis are simply not up to the task of effectively ending bad behavior by bankers.

nearly half of the high-income earners say law enforcement and regulatory authorities in their country are ineffective “in detecting, investigating and prosecuting securities violations.”

Second, the survey found a high percentage of bankers are willing to misbehave when opacity means there is little chance they will get caught.

Equally disturbing was that many respondents said they would use nonpublic information to make a guaranteed $10 million, if there were no chance of getting arrested for insider trading. A quarter said they would do so. That’s up from two years ago, and it is that attitude of “getting away with it” that worries many who hope to root out problems in the industry.

This point is very important and needs to be repeated.

When operating behind a veil of opacity, Wall Street bankers will break the law to make money.

Since the 1920s, it has been known that there is only one proven way of ending this misbehavior: transparency.  There is a reason sunlight is the best disinfectant.