Banks Must Disclose Capital Under SEC Rules

The U.S. Securities and Exchange Commission will require investment banks to disclose their capital and liquidity levels after the agency was criticized for regulatory failings in the wake of the Bear Stearns Cos. collapse. Wall Street firms declined on the news.

"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," the chairman of the SEC, Christopher Cox, told reporters yesterday. "Making that information public can certainly help."

The SEC is re-evaluating its oversight of securities firms after the Federal Reserve had to help rescue New York-based Bear Stearns in March to prevent a market panic amid a worldwide credit contraction. Concern that Bear Stearns was running short of cash prompted customers and lenders to desert the firm in March, forcing it to accept a takeover by JPMorgan Chase & Co. Data on capital and liquidity will be required this year "in terms that the market can readily understand and digest," Mr. Cox said.