Abstract Information about asset quality is often not disclosed to asset markets. What
principles determine when a financial regulator should disclose or withhold information? We
explore this question using a risk-sharing model with intertemporal trade and limited
commitment. Information about future asset returns is available to society, but legislation
dictates whether this information is disclosed or not. In our environment, nondisclosure is
generally desirable except when individuals can access hidden information–what we call …