Andrew Lo of MIT thinks we need the capital markets equivalent of the National Transportation Safety Board, an independent and disinterested group that comes in after crashes, literally and metaphorically speaking, and sifts through the wreckage. He makes the sure-to-be controversial proposal in an article on hedge fund losses in the current issue of CFO.
It’s a nice idea, but I’m not particularly sanguine about its practicality. Who would these investigators be? How would we make sure there was no strategy leakage, and yet have transparency about crash causes? Tough stuff.