SEC head says looking at disclosure of banks

Wed Nov 7, 2007 1:21am EST
TOKYO (Reuters) - The U.S. Securities and Exchange Commission is looking at whether or not U.S. banks exercised proper disclosure when announcing their investments in subprime-mortgage products, SEC Chairman Christopher Cox said on Wednesday.
The SEC was also continuing to investigate the role of ratings agencies in the subprime crisis, but has yet to determine where "next to head", Cox said.
Cox, in Tokyo to participate in a conference of financial regulators, told a group of reporters the SEC, along with other agencies, was trying to determine if banks had practiced sufficient disclosure about subprime investments.
The SEC has said it is investigating whether credit-rating firms were unduly influenced by issuers and underwriters of products related to subprime mortgages.
Credit rating agencies have been criticized for not responding quickly enough to deteriorating conditions in the subprime market.
They have also been accused of conducting weak analyses and granting higher ratings because they are paid by the firms whose securities they rate.
The SEC began examining credit rating firms under a 2006 law that gives the SEC more oversight of the industry.