H.R. 6038 or The Financial Transparency Act of 2010 was proposed by House Oversight and Government Reform Committee Ranking Member Darrell Issa (R-CA) on July 30th. It’s a bill that deserves the support of anyone who believes that greater transparency of financial information is one way of helping to prevent the financial failures of the past and maybe even surface the financial opportunities of the future.

By mandating the adoption of consistent data standards for information that regulators are already collecting from public companies, banks, exchanges, and other market actors, this bill will move the whole industry toward unprecedented transparency and liquidity.  Crowd-sourced oversight by analysts, media, watchdog groups, and the public, Mr. Issa believes, is the best hope for averting and mitigating future financial crises.

‘Crowd-sourced oversight’ certainly has the potential to be a powerful force for ‘averting and mitigating future financial crises’. And to enable this, the bill rightly emphasizes the importance and need for the use of  ‘data standards’ by a number of Government agencies, by which is meant:

(b) Characteristics Of Financial Data Standards.—The data standards required by subsection (a) shall, to the extent practicable—

“(1) incorporate widely accepted, nonproprietary, searchable, computer readable data formats;

“(2) be consistent with and implement—

“(A) United States generally accepted accounting principles or Federal financial accounting standards (as appropriate);

“(B) demonstrated best practices; and

“(C) Federal regulatory requirements;

“(3) improve the transparency, consistency, and usability of business and financial information;

“(4) ensure interoperability and appropriate reuse of information;

“(5) reuse, enhance, harmonize, and integrate existing standards as possible and appropriate;

“(6) be capable of being continually upgraded to be of maximum use as technologies and content evolve over time; and

“(7) be consistent and interoperable with one another.

Now who can quibble with that? Stop being blindsided by information opacity and support the bill. And anyway, Rep. Issa is one of the few officials around who has a POGO award.