Why was the concept of disclosure critical for regulatory reform after the 1930s stock market crash?

The significance of disclosure as a concept for regulatory reform following the 1930s stock market crash lies primarily in its role in promoting transparency within capital markets. After the crash, there was a stark realization that many investors had been making decisions based on incomplete or misleading information. This lack of transparency contributed to the market's volatility and the eventual crash, as investors could not accurately assess the value or risks associated with various securities.

In response, regulatory reforms were implemented, including the establishment of requirements for companies to disclose relevant financial information to the public. This emphasis on transparency aimed to instill confidence in the markets, enabling investors to make informed decisions based on a more accurate representation of a company's financial health and operational practices. By ensuring that accurate and comprehensive information was readily available, the regulatory changes aimed to rebuild trust and stability in the financial system, safeguarding both investors and the overall economy.

The focus on transparency ultimately helped to create a more stable investment environment, where investors felt more secure knowing they had access to essential information, thus preventing potential abuses and promoting fairer practices across markets.