Goldman, Morgan Stanley, BofA Ask Buyers of Bank Risk to Disclose Leverage

US banks including Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. are asking investors to disclose whether they plan to use additional debt to invest in significant risk transfers as regulators scrutinize them for threats to financial stability, according to people with knowledge of the matter.

The question, which was included at the start of the marketing process in recent months, is being asked as authorities raise flags over the use of leverage by investment firms that want to buy SRTs — a type of deal that helps a bank sell risk tied to their loan portfolios. Since the debt provider would be another bank, the credit risk, to a certain extent, would just be moved to another part of the financial system.