Regular readers know that the only way to end gambling by Wall Street firms (aka, the Too Big to Fail) is to require them to provide ultra transparency and disclose on an on-going basis their current asset, liability and off-balance sheet exposure details.
This disclosure allows the market to see if Wall Street gambles and increase the cost of Wall Street's access to funds to reflect the risk if it does. A higher cost of funds is the markets way of restraining Wall Street's risk taking.
I wouldn't want the banks to perceive that they were operating at a competitive disadvantage so I would propose that ultra transparency be adopted globally.
After all, it would be grossly unfair to adopt ultra transparency in the US and not the EU or UK.
With ultra transparency, market discipline would reduce the risks US banks carry. Financial theory tells us that this reduction in risk would be rewarded with a lower cost of funds and a higher stock price. As a result, if only the US requires ultra transparency, then banks from every other country would be operating at a competitive disadvantage.
Which is why ultra transparency needs to apply to all of a bank's exposure details globally.