Wall St's risky investments clearer-SEC official

WASHINGTON (Reuters) - Some big Wall Street investment banks took "a remarkable step forward" with disclosures of risky securities when they recently reported fourth-quarter earnings, a senior official at the U.S. Securities and Exchange Commission said on Tuesday.

Merrill Lynch & Co Inc MER.N and Citigroup Inc (C.N) did a particularly good job detailing subprime mortgage-linked investments and explaining how they valued their positions, said Matt Eichner, an assistant director in the SEC's division of trading and markets.

"The disclosures they reported in their earnings releases is a remarkable step forward," Eichner, who heads the agency's office of risk analysis, said at an international banking conference in Washington.

The SEC oversees the top five U.S. investment banks under its consolidated supervised entity program, which aims to diminish the risk that a weakness at one of the firms could spread to broader markets.

The program has taken on heightened importance as large investment banks have been forced in recent months to take billions of dollars in write-downs on their stakes in mortgage-related securities.

Merrill's fourth quarter was the worst in its history and included $11.5 billion in write-downs on U.S. collateralized debt obligations (CDOs) and subprime mortgage-related securities, according to results released in January.

Citigroup, the largest U.S. bank, reported a record $9.83 billion fourth-quarter loss with an $18.1 billion write-down.

Eichner said the improvements in disclosures may shade the SEC's discussions as it considers whether to mandate more disclosures about risky securities.

But he said it would not be helpful to increase disclosure of the current securities roiling markets, including CDOs and exposure to bond insurers, as they have become "legacies at this point."

"It would be mandatory disclosure of things of less and less interest," he said.

(Reporting by Karey Wutkowski; Editing by Jonathan Oatis)