Reserve Bank Governor, Glenn Stevens, yesterday commented on the lack of information about the current problems on the credit markets and who is really responsible for the rise in rates.

The biggest problem thus far has not been that exposures are large, but that they are not transparent. The sooner they are all on the table, the sooner the uncertainty will be lessened and the sooner market participants can discriminate sensibly among their counterparts.

This is not easy to achieve given the pricing issues, but at the moment, there is widespread suspicion in the absence of clear information. It would be very damaging for that lack of information to lead to a lengthy period of severely reduced credit flow to perfectly good borrowers simply because investors cannot tell who is sound and who is not. More information is needed.

He didn’t mention the bankers and their mates, the very people the US Fed has helped bail out with its overnight rate cut, but read between the lines: the information is with the bankers, the investors, the ratings agencies but not all regulators.

It’s not often you get a central banker who calls for clarity of information in markets. After all, they are supposed to know everything, aren’t they?

And if the likes of Stevens feel they are operating in an information vacuum, you’d be entitled to ask, does that include the Fed, the Bank of England and others?

And if it’s yes, why then did the Fed cut rates by 0.50% and why did the British Government publicly issue a guarantee to protect all deposits of banks in trouble after that horrible run on the Northern Rock which was only ended by the public guarantee?

You see, it explains why the Fed cut its Federal Funds rate so deeply: because of the shortage of accurate information where the risks are concentrated and which bank or investor is next to fall (like Northern Rock and those horrible pictures of three days of customers lining up to take their money out). Cutting in ignorance is better than not cutting and waiting for the picture to clear.

The Fed had no choice, unfortunately, even though it has probably saved those responsible from paying the full price for causing the whole mess in the first place.