Here, it is important to focus not only on the quantity of the information revealed, but also on its relevance, which, in turn, depends on the specific nature of the market and the preponderance of benefits over costs. For example, the optimal degree of transparency could differ between the bond and the stock markets. Finally, efficiency is bolstered by promoting financial stability in general.
When well-designed rules give rise to systemic stability, resources are freed up that can then be devoted to more productive ends. To a large extent, this is the purpose of the international standards in Basel II, which sets banks' regulatory capital requirements as a function of the individual risks assumed. The current Basel I standards are not that sophisticated.