Bankers’ Complaint of Uncertainty Obscures Reluctant Disclosure

While bankers complain that regulatory uncertainty is hurting growth, their failure to provide balance-sheet transparency is creating uncertainty for the taxpayers who bailed them out.

Europe’s sovereign-debt crisis already claimed MF Global Holdings Ltd., the brokerage run by Jon S. Corzine that collapsed on Oct. 31, and credit-default swap prices imply a more than 1-in-5 chance of default for Morgan Stanley, Goldman Sachs Group Inc. and Bank of America Corp. in the next five years. That’s up from about 1-in-10 odds at the beginning of July, according to data provider CMA and a standard credit-swaps industry-pricing model.