Banks Sidestep SEC Oversight on Risk Disclosure, GAO Report Says

Why It Matters Shareholders lost more than $29 billion in investments in two banks that failed in spring 2023 and operated without a holding company between the end of 2022 and May 2023. A Government Accountability Office (GAO) report was published and publicly released on Sept. 3, 2026, and was addressed to the House Financial Services Committee. The Big Picture GAO reviewed 2021 and 2022 disclosures for the three banks that failed in spring 2023; all three banks described setting thresholds for interest rate and liquidity risk management, but never disclosed when those thresholds were breached or how breaches were addressed. The Securities Exchange Act of 1934 and federal regulations require public companies to disclose information about business risks and financial results. Yet for public banks without holding companies, Congress charged banking regulators with certain functions and duties that would normally fall to the U.S. Securities and Exchange Commission (SEC). Banking regulators' review processes, unlike the SEC's, do not assess disclosures for investors' benefit. They focus on safety and soundness of the banking system itself, not on whether shareholders have the information they need to make informed decisions.