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Earlier this month, the British government's treasury department issued a white paper on "Reforming financial markets."
Among its proposals is a labeling system for financial products. The proposed labeling system is akin to the "traffic-light" system the UK government currently applies to food products. You can read more here about how the food labeling system works, but basically it applies a red, yellow, or green light for each of four characteristics within food: fat, saturated fat, sugar, and salt. The labels appear on food packaging.
To be sure, this is aimed at retail consumers, for whom the food labeling has reportedly proved useful. Still, it's hard to imagine how you transfer that concept from frozen pizza to, say, a sub-prime mortgage. ("Warning: Do not eat more than your own body weight of this frozen pizza.")
What's most interesting about this proposal is that Her Majesty's Treasury says it is likely to be compulsory, which seems like the beginnings of a government credit-rating system.
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