For more than a decade, I headed up the day-to-day investment oversight efforts at American Century Investments. 

I'm not sure if he's still there, but the head trader at the time had a big sign in the trading room. It prominently displayed a memorable and timeless quote from Justice Louis Brandeis, a member of the U.S. Supreme Court in the 1920s and 1930s.

The sign read: "Sunlight is the Best Disinfectant."

In light of continuing political turmoil as bailout packages are debated, I am reminded of Justice Brandeis' words of wisdom.   

Much discussion of the crisis has centered on blame. Who and what is responsible for the crisis? We'll be debating those "blame" issues for a long time.

However, one of the key overriding issues to emerge, in addition to greed, leverage and oversight is transparency.

Why is the extent of the toxicity so vague? Why are all these distressed securities so opaque? How can we not know the extent of the problem debt? Why is it all so invisible?

These are very pertinent questions. There clearly is a lack of transparency surrounding many of the securities at the heart of the credit crunch.

Blackstone Group co-founder, Pete Peterson, who, ironically, ran Lehman in the '70s, told a reporter last week, "The biggest problem we have is how to oversee, regulate and monitor new securities that are not well understood."

He hit the nail on the head. Combining a lack of transparency with inherently complex instruments (and 30:1 leverage) and a lack of understanding by market participants and regulators alike creates a recipe for financial calamity.

ETFs Long-Term Winners

A more practical observation is that transparency is bound to emerge as a winner. Complexity is the big loser as are opacity, ambiguity and invisibility.

A new era of renewed emphasis on transparency and understandability in the capital markets is ahead.

And this rolling transparency revolution will further enhance the stature of exchange-traded funds.

A revolution in transparency will be good for price discovery, good for market clearing and good for investors. It may take years to fully play out, but clearly ETFs with their greater transparency figure to be big, long-term winners.

Against this backdrop, ETF structures just got more valuable. This renewed emphasis on clarity and transparency will play right into the hands of ETFs.

Why? ETFs obviously have numerous attributes, such as lower costs, greater tax efficiency, diversification, flexibility and reach, which are allowing them to take market share from traditional vehicles.

However, the attribute that will shine brightly in the ensuing weeks is transparency. ETFs are a ray of sunlight in capital markets where many opaque "products" can lurk.

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