Regulators may outline new rules to target so-called window dressing, a practice that some banks use to temporarily reduce their debt levels before reporting their finances.

The SEC is scheduled to raise the matter at a meeting on Friday, then issue proposals for public comment, The Wall Street Journal said.

Window dressing isn't illegal, but it can understate banks' borrowing and risk taking. According to a Wall Street Journal analysis, 18 large banks as a group consistently lowered debt at the end of each of the last six quarters. On average, they reduced debt by 42% from the quarterly peak.

Since the financial crisis, regulators have worked to make bank balance sheets more transparent and to restrict risk taking.

The SEC is expected to propose rules demanding greater disclosure from banks and corporations regarding their short-term borrowing.

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Is the SEC really working WOW!! Is it because the American Public is a tad annoyed that these lazy good for nothigs let people like MadeOff with our money get away with stealing -- or how about Mr. Fuld, at GS who "really didn't see it coming" when Alan Greenspan saw it coming 5 years ago. Or is it that the banks are about to crash again, when the commercial real estate market hits the skids.

September 16 2010 at 11:25 AM Report abuse rate up rate down Reply