Regulators group plays down need for new rules

By Pedro Nicolaci da Costa

NEW YORK (Reuters) - A group of U.S. and European regulators said on Friday existing disclosure practices in the financial industry are largely adequate despite a persistent crisis of confidence that has cost banks over $200 billion (101.4 billion pounds).

"The results of the survey indicate that disclosure practices can be enhanced without necessarily amending existing disclosure requirements," the group said in a statement released by the New York Federal Reserve.

The Senior Supervisors Group, composed of regulators from France, Germany, Switzerland, Britain and the United States, was asked to review disclosure practices in response to a request from the Financial Stability Forum, led by Bank of Italy Governor Mario Draghi.

The report did not contain major recommendations, and consisted mostly of an assessment of current practices, acknowledging at least the need for greater scrutiny.

"The recent market turmoil has heightened the desirability for financial firms to publicly disclose their exposures to certain instruments that the marketplace now considers to be high-risk or involve more risk than previously thought," the report said.

A crisis that began with rising defaults in the U.S. mortgage sector has since crippled the global banking system, generating a spike in the cost of interbank borrowing and creating general mistrust among financial institutions.

This culminated in the near-bankruptcy of Bear Stearns, once the fifth-largest U.S. investment bank, in March. That incident led the Federal Reserve to provide funding for JP Morgan's buyout of the firm in an effort to prevent broader impact on the financial system.

These troubles are expected to have wide-ranging implications for the global economy, with many leading experts saying the United States is already in recession.