Transparency through Financial Claims with “Fingerprints”: a Mechanism for Preventing Financial Crises

This article, to appear in the September issue of the FAJ, proposes an incentive-compatible mechanism that
takes “fingerprints” – or a complete record of the original mortgage transactions and subsequent securitization – of the original mortgages of MBS and CDO transactions, and proposes to solve many of the markets’ problems without stricter regulation or impeding potential innovation.