SOURCE: Milken Institute

Milken Institute

April 22, 2009 12:00 ET

Financial Reforms Could Decrease Investment Risk and Increase Economic Growth, According to the Opacity Index, Released by Milken Institute

LOS ANGELES, CA--(Marketwire - April 22, 2009) - With more countries adopting international accounting standards, the global financial system has become more transparent in the past year, according to the latest Opacity Index.

Thirty-three of the 48 countries included in the index improved their overall score since last year's rankings.

"This is the second year in a row that we have seen opacity scores decrease across the board," said Joel Kurtzman, Senior Fellow at the Milken Institute. "This is primarily because countries are replacing homegrown accounting standards with formal, internationally accepted standards."

However, many economies continue to be hurt by significant opacity in their credit markets and financial institutions, including inappropriately priced risk in the mortgage markets, lax regulatory oversight and a failure to apply existing regulations.

In the 2009 rankings, Finland again comes in at No. 1, underlining the country's stable regulatory environment, low levels of corruption and high compliance with international standards for accounting rules and practices.

The Top 10 markets (with 2008 ranking):

Rank                2009 Opacity Score
1.  Finland (1)                9
2.  Hong Kong (2)             12
3.  Australia (4)             14
3.  Singapore (3)             14
3.  Sweden (4)                14
6.  Denmark (6)               15
6.  Ireland (6)               15
8.  Austria (6)               16
9.  Germany (9)               17
10. United Kingdom (9)        18

The report, released by the Milken Institute and Kurtzman Group, also notes that regulations now being considered to address the causes of the credit market meltdown could provide more transparency in the future.

The Opacity Index measures five factors: corruption, legal system efficiency, accounting standards, regulatory effectiveness and economic and enforcement policies. Together, these factors form the acronym CLEAR. Higher levels of opacity in each of the CLEAR factors indicate a poorly functioning government, which increases the cost of doing business as well as the risk.

The 2009 Opacity Index is available on the Milken Institute Web site,

About the Milken Institute: The Milken Institute is a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. It is based in Santa Monica, Calif. (

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