SEC commissioners voted unanimously on Friday to propose new rules for financial firms to disclose more information about their short-term borrowings.
The expanded requirements would force banks to disclose their practice of temporarily trimming their debts each quarter to bolster their balance sheets, the report said. Although legal, this practice can distort investors' picture of a bank's debt and level of risk, according to the regulators.
Under the new rules, financial firms would have to report the amount outstanding of their short-term borrowings each quarter and the average interest rate they paid on those borrowings. At present, banks are required to disclose that borrowing just once a year, the Associated Press report. They would also have to report the average amount of loans outstanding during the quarter, the average interest rate and the maximum amount outstanding.
Following their 5-0 vote, the SEC commissioners opened the proposed new rules to public comment for 60 days.
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