If it's merely a political decision, then politicians have spoken loud and clear for the last 30 years. Unfortunately, they haven't spoken on the side of longer time tics.

It seems reasonably obvious that nobody needs day-to-day liquidity in his investments, or even week-to-week, so the tradeoff here is fairly one-sided. When you get into several months, it becomes more iffy, because you get a larger downside (and possibly also a smaller upside).

I don't see it.

Firstly, there is the physical constraint from the volume flow of transactions. With millions of market participants performing one or two transactions every day or every week only, for example, the total number of transactions in a single day is still huge. So there has to be constant activity to balance the books, unless you can limit the number of market participants to a handful.

Secondly, modern replication strategies require frequent rebalancing of portfolios down to the smallest time interval possible. Whatever that time interval is chosen to be, expect millions of shares to be bought and sold during that interval market wide. The volume of transactions will not lessen if the time interval is increased, it will stay exactly the same at best and might probably even increase.

Such tradeoffs are inherently political. And the fact that this decision is currently made by programmers and [S:traders:S] professional gamblers at Goldman rather than in democratically accountable parliaments does not make it any less political.

I would say that there is a strong practical component involved. Politicians cannot legislate physical reality. Unfortunately, the one thing they should be doing, which is to allow the gamblers to lose their shirts and die, they do not wish to do.

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$E(X_t|F_s) = X_s,\quad t > s$