Australia's central bank governor calls for greater subprime disclosure

SYDNEY (Thomson Financial) - Australia's central bank governor Glenn Stevens on Tuesday called on financial institutions to fully disclose their exposures to the US subprime mortgage crisis.

In a speech to the CEO Asia Update Luncheon in Sydney, Stevens said the lack of transparency - not the size of the exposures - was the biggest problem facing financial institutions.

''The sooner they are all on the table, the sooner the uncertainty will be lessened and the sooner market participants can discriminate sensibly among their counterparts,'' Stevens said in his speech.

''It would be very damaging for that lack of information to lead to a lengthy period of severely reduced credit flow to perfectly good borrowers simply because investors cannot tell who is sound and who is not. More information is needed.''

Stevens said while the global credit crisis may not be over, Asian countries and Australia appear to be "weathering the storm fairly well".

Stevens said the central bank will maintain a tightening bias, noting the strength of the Australian economy going into the credit crisis and the fact there have been few signs of momentum slowing.

''Assessments of how much is warranted could be affected by changes in the international environment as well as by developments in the domestic economy. These are matters the Board will need to grapple with over the period ahead,'' Stevens said.