SEC Wants Greater Disclosure

Investment banks are under pressure from the Securities and Exchange Commission to make public details of their funding levels. In a speech yesterday, SEC Commissioner Christopher Cox said four of the largest banks overseen by the SEC have agreed to begin providing liquidity information "in terms that the market can understand."

Speaking at an annual conference of securities traders, Cox said the four largest banks would provide "actual capital and liquidity positions...in terms that the market can readily understand and digest."

Commercial banks are required to disclose capital ratios under an earlier stand set by the international consortium, Basel Committee on Banking Supervision. Eventually all banks will have to comply with new liquidity rules as required by Basel but the voluntary disclosure of funding levels hastens the process.

Cox, who said the disclosures would begin after the second quarter, seek to restore investor confidence in the aftermath of the collapse of Bear Stearns. "It is impossible for anyone to say that in this case, the system worked," he said. Cox is pushing for greater authority from Congress to regulate investment banks.