Regulatory Dilemma of Tool Complexity

When financial instruments become too complex for average investors to understand, regulators face a fundamental dilemma: either ban innovative products or mandate greater transparency—yet neither fully resolves the knowledge gap. This reflects an inherent governance challenge: information asymmetry cannot be completely eliminated.

Articles on this principle

• South Korea's Financial Supervisory Service and the ETF Dilemma: Can Responsibility Shifting Bridge the Information Gap?

  When asset managers are tasked with "ensuring investment information accuracy" but ETF tracking errors are fundamentally impossible to eliminate entirely—what kind of "accuracy" is the regulator actually pursuing?