He settles the question by talking about Freddie Mac.
Question: Isn’t it meaningless to look at [Freddie Mac's] inverse floaters in isolation? To assess risk, shouldn’t we look at the entire portfolio held by Freddie Mac?
Answer: Analyzing Freddie Mac’s portfolio as whole would be the best way to measure its risk, but the enterprise has never disclosed the securities that it is holding, nor has it announced any intentions to change this practice.Since the company will not voluntarily provide ultra transparency, financial regulators will need to require ultra transparency.
Without full information, analysts can only look at what Freddie Mac is forced to disclose, which is precisely what led to the discovery of these highly levered inverse floaters.
To truly evaluate the risk of the firm, analysts would need to understand the composition of the entire portfolio, the hedges and liability structure.Clearly, Mr. Boyce feels that with his background he could analyze the risk of Freddie Mac's portfolio if there were ultra transparency. So there is at least one analyst who would not be overwhelmed by the data made available under ultra transparency.
In addition, his comments indicate that he thinks that there are other analysts who could also analyze the risk if they had access to the information provided by ultra transparency.
If analysts can handle Freddie Mac, it strongly suggests they could handle any financial institution.