Excuse me, but doesn't every market participant want to know if a financial institution is rescued? Without this knowledge, how could market participants properly assess the risk of the financial institution after the rescue?
Does this also mean that regulators could recapitalize all the Eurozone banks and not tell anyone?
Clearly, a regulation like this would not exist under the FDR Framework. With its clear disclosure requirements, a financial institution "rescue" would be immediately well known.
Regulators, banks and insurers will be handed the power to hide the existence of emergency bailouts if it is argued public disclosure could have a "systemic" impact, under the EU's new Market Abuse Regulation.
With the regulation, a draft of which has been seen by Global Financial Strategy, financial institutions and supervisors will be able to withhold inside information from investors if release could lead to large losses.
In practice, it could mean that a bank with a serious hole in its accounts could resist informing shareholders, the stock market and the public if it successfully claimed disclosure might badly hit the share price of itself or others.