Busted: Bankers and The Global Economy

May 8, 2008

Wall Street and Forced Public Disclosure

Filed under: banking, investment, money — Tags: , , — digitaleconomy @ 12:25 am

The Securities and Exchange Commission, previously caught unaware by the collapse of Bear Stearns, is mandating that all investment banks disclose their capital and liquidity levels later this year.

“One of the lessons learned from the Bear Stearns experience is that in a crisis of confidence, there is great need for reliable, current information about capital and liquidity,” stated SEC Chairman Christopher Cox. “Making that information public can certainly help.”

Wall Street doesn’t like the bright lights. After the announcement, the five biggest firms had their largest share price declines in a month. The SEC already collects certain information, but doesn’t make it public. Whether public disclosure helps or hurts will only be revealed when it happens.


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