❗Let's close the gap: We still need your help to raise $40,000 by April 1. Donate now

SEC tells investment banks: Come clean

Marketplace Staff May 8, 2008
HTML EMBED:
COPY

SEC tells investment banks: Come clean

Marketplace Staff May 8, 2008
HTML EMBED:
COPY

TEXT OF STORY

Scott Jagow: When the Federal Reserve stepped in and helped bail out Bear Stearns, we said Wall Street might have to pay a price for it. This might be it: The Securities and Exchange Commission wants investment banks to come clean with how much debt and capital they have on their books. Amy Scott reports.


Amy Scott: In a speech yesterday, SEC chairman Christopher Cox said the banks will report their positions in “terms that the market can readily understand and digest.” Investment banks have been under more pressure since the near-failure of Bear Stearns almost two months ago. That’s when the Federal Reserve opened its discount window to the banks. The short-term financing was previously only available to the more heavily regulated commercial banks. Management consultant Peter Cohan:

Peter Cohan: The commercial banks have access to the Fed and they have to disclose more, and so it only seems fair to do the same thing for anybody else who borrows from that discount window.

The SEC is also requiring investment banks to have more capital on hand.

In New York, I’m Amy Scott for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.