This is very important because it is an example of how regulators add instability to the financial system.
Regular readers know that market participants are dependent on the regulators because they have access to current bank exposure level details. The other market participants don't have this data and instead receive disclosure that leaves the bank resembling a 'black box'.
For market participants to properly adjust their exposures based on the risk of each bank, the regulators must both correctly assess this risk and communicate this risk to the market participants.
Clearly, the need to talk with one voice in official public statements means that differences of opinion on risk are stifled by a permanent barrier that is part of the DNA of financial regulators.
As shown by this example, the official would have had to convince all of her superiors at the Department of Finance in order to have her opinion included in the official public statements.
One of the advantages of requiring banks to provide ultra transparency and disclose on an on-going basis their current asset, liability and off-balance sheet exposure details is it ends reliance on the regulators to properly assess and communicate the risk of each bank.
The Sunday Independent today reveals how a catalogue of stark warnings by a Department of Finance official on the risk of a property crash were systematically ignored and dismissed by senior civil servants in the preparation of official public statements.
In one revealing email, the whistleblower official warned in 2006, at the height of the boom, of "increased residential mortgage defaults thereby exposing the banking sector".
But instead of being acknowledged as a prescient forecaster of impending economic woes, assistant principal officer Marie Mackle was told that such language was "inappropriate" for a public ministerial speech and "positively alarmist".
"I've paid the price for being an internal whistleblower," Ms Mackle wrote in 2011 in a memo in which she says she has been left "progressively alienated and isolated".
But had her dire warnings, from 2005 to 2007, been brought to public attention, it is believed much of the current mortgage crisis could have been averted.
Ms Mackle's hundreds of emails, briefing notes and speeches will feature prominently in an inquiry into the banking collapse to be held by the Dail's Public Accounts Committee (PAC).
Yesterday PAC chairman John McGuinness said the revelations contained in Ms Mackle's documents were "absolutely shocking".
He said: "The public and every member in Leinster House will be appalled and deeply shocked to know that such warnings within the Department of Finance were not shared with them.....
Ms Mackle prepared a detailed file for various bodies, including PAC, Transparency Ireland and the Nyberg Commission, which examined the banking crash....
The documents reveal, that between January 2005 and early 2007, Ms Mackle repeatedly attempted to include references to the risks from over-reliance on the property market in official departmental statements, as well as speeches by the then Finance Minister Brian Cowen and in replies to parliamentary questions tabled by Opposition TDs.
It is documented how senior officials repeatedly removed, erased and dismissed such warnings in favour of more optimistic language.
A number of those senior civil servants implicated still occupy key positions in the Department of Finance and the Department of Public Expenditure and Reform....
Another senior official, Derek Moran,... ordered Ms Mackle to formulate a response highlighting the positive aspects of the property market.
"Go back to them and say this. . . the large increase in new housing supply will restore equilibrium to the market. . . There is a broad consensus amongst commentators that the most likely outcome for the housing market is a 'soft landing'. Government continues to run a prudent, stability-orientated budgetary policy. . ." Mr Moran wrote.
Also in 2006, Ms Mackle attempted to warn in a speech that Mr Cowen gave to a builders' conference in early 2006 that the never-ending spiral in house prices increased the risk of "default on residential mortgages thereby exposing the banking sector".
Her warning was dismissed and Ms Mackle was told: "Marie, this type of material is not appropriate or suitable for a ministerial speech. It is positively alarmist in tone in some areas."
In documents she sent to the Nyberg Commission, Ms Mackle said she had paid the price for trying to speak up.
"As matters stand currently, I am completely ostracised and my work is ignored," she said.
This alone makes the case for requiring the banks to provide ultra transparency.