Credit market losses look likely to double from current levels, and while the losses are fairly contained, there are lessons to be learned from the turmoil that arose this summer, say economists with TD Bank Financial Group.

So far, financial institutions have booked losses of around $30 billion, TD reports. It predicts that the grand total is likely to come in at about double this amount when all is said and done. “While not an insignificant sum, if spread evenly across investors worldwide, this would equate to just a nickel loss for every $100 invested in global bond and stock markets,” TD notes.

However, TD also says that the turmoil revealed that market transparency must improve. “The cone of silence that descended on many financial institutions this summer when it came to discussing exposures has made resolving market disruptions slower than it might have otherwise been. But the lack of transparency runs much deeper,” it says.

“There are certainly many lessons still to be learned from this summer’s tumult. Financial markets are still rethinking the new business models developed in recent years which employed rapid securitization and distribution of risk,” TD adds.

“Unfortunately, periods of rapid financial innovation tend to be followed only later by understanding. Additionally, there has been an unfortunate relationship – those investors with the least transparency are increasingly buying the riskiest financial products. In the weeks and months to come, there will be more financial institutions around the world reporting more losses as a result of the summer’s turbulence,” it maintains.

“These admissions are cathartic for financial markets. More progress needs to be made, however, to improve transparency, especially when it comes to the seemingly simple question of who is buying what?” it concludes. “Our increasingly advanced and globalized financial markets have the tools they need to address current and future dislocations, but you can’t fight what you can’t see.”