Eleven publicly traded U.S. banks are not subject to Securities and Exchange Commission review of their annual disclosures because they operate without a corporate parent, according to a Government Accountability Office report released Sept. 3, 2026.
Two of those 11 banks hold more than $80 billion in assets each, GAO said. For banks structured without a bank holding company, Congress assigned certain SEC functions and duties to federal banking regulators instead.
GAO said it found that banking regulators’ review processes, unlike the SEC’s, do not assess disclosures for investors’ benefit. The report recommends that Congress consider reassessing who holds the authority to review annual financial disclosures for public banks without holding companies, for investor protection purposes.
The 2023 failures
Three of the 30 largest U.S. banks failed in spring 2023, shortly after their financial statement audits were completed, GAO said. Two of the three operated without a holding company.
Shareholders lost more than $29 billion in investments in those two banks between the end of 2022 and May 2023, according to the report.
GAO said it reviewed the 2021 and 2022 disclosures of all three failed banks to examine what they told investors about interest rate and liquidity risks. GAO and banking regulators previously found that weak management of those risks contributed to the failures, the report said.
Each of the three banks described setting thresholds for interest rate or liquidity risk, GAO found, but none disclosed when those thresholds were breached or how the breaches were addressed.
The materiality question
Public companies must disclose information investors would find important when making investment decisions, including audited annual financial statements and descriptions of risk factors and financial performance, under the Securities Exchange Act of 1934 and federal regulations.
GAO said the SEC has identified other banks whose disclosures on interest rate and liquidity risk could be improved, but that SEC staff have not issued public guidance on how companies should determine whether a breach of an interest rate or liquidity risk tolerance is material to investors.
The report recommends the SEC chairman ensure that the director of the Division of Corporation Finance provide informal staff guidance — such as through Corporation Finance Interpretations or another public source — on assessing the materiality of such breaches, “particularly during periods of rising interest rates.”
The SEC disagreed with the recommendation, noting that staff provides post-disclosure feedback as warranted, according to GAO. GAO said it maintains the SEC should implement it. Both the congressional matter and the SEC recommendation are listed as open.
Audit oversight
Accounting firms that audit public companies must register with the Public Company Accounting Oversight Board, the nonprofit body Congress created in 2002 to focus on audit quality.
Certain auditor responsibilities — such as evaluating a company’s accounting estimates and its ability to continue as a going concern — can be particularly challenging in bank audits, according to PCAOB staff, auditors and others cited in the report.
GAO said it was asked to review oversight of bank financial disclosures and external audits after observers raised questions about whether auditors had properly fulfilled their roles and whether the failed banks had clearly disclosed material information. The review examined PCAOB auditing standards, SEC and banking regulator disclosure review processes, SEC public comments to bank holding companies, and the failed banks’ annual disclosures, and included interviews with staff from the SEC, banking regulators, the PCAOB and accounting firms.
Source: U.S. Government Accountability Office, “Bank Financial Disclosures: Actions Needed to Improve Oversight of Information Provided to Investors” (GAO-26-107719), published and publicly released Sep 03, 2026. The full report runs 53 pages; figures and findings above are drawn from the report’s highlights and recommendations pages.