Why are the Fed and SEC keeping Wall Street's secrets?

In his Bloomberg column, William Cohan asks the simple question of 'why are the Fed and the SEC keeping Wall Street's secrets?'

Getting what should be public information about major Wall Street firms can be maddeningly difficult....

Actually, to most market participants its is practically impossible.  Which is a huge problem because our capital markets are based on disclosure!

I was hoping to discover how that whole thing went down at the time, and how Goldman and Morgan Stanley got the Fed’s blessing but Lehman Brothers Holdings Inc. did not. Also I was interested in Goldman’s interactions with the Fed since that fateful moment. 

My hopes were raised further when I heard from people at the firm that Goldman had reviewed the contents of what was being sent to me and that its executives seemed worried about it.

No such luck. On the disk was nothing more than a bunch of obscure -- but publicly available -- Federal Reserve documents about the details of Goldman’s assets and liabilities on a quarterly and annual basis, everything from the kinds of loans the firm had been making to the tenor of its derivatives book to whether the real-estate loans it owns were backed by commercial properties or residential properties. 

The documents contained a bunch of detailed numbers (without explanation) about the kinds of risks Goldman was taking at a moment in time, thus prying open ever so slightly the firm’s black box. 

For instance, who knew that at the end of December 2011 Goldman had $44.2 trillion in the notional amount of derivatives contracts on its books, about $1.3 trillion more than it did in 2010? Or that $36 trillion of that amount was for contracts of less than one year in tenor? Or that Goldman had $19 billion in insurance underwriting assets, up nearly 40 percent from the year before? Or that Goldman’s book of commercial and industrial loans was $7 billion at the end of 2011, up dramatically from the $829 million it held at the end of 2010? Or that the firm’s stash of mortgage-backed securities -- now $1.37 billion -- had nearly doubled what it had at the end of 2010?...

All of this information and more would be available if our regulators required banks to provide ultra transparency and disclose on an ongoing basis their current asset, liability and off balance sheet exposure details.

This is the data that market participants need if they are going to be able to assess the risk of each firm.  It is this assessment that ends contagion as market participants adjust the amount of their exposure to what they can afford to lose given the risk of each bank.

Mr. Cohan delivers the punchline for why ultra transparency is needed.

If our government agencies continue to do everything in their considerable power to keep hidden information that belongs in the public realm, all the regulatory reform in the world won’t end the rot on Wall Street.