What the SEC Is Proposing

The SEC’s proposal allows any public company to file a new Form 10-S, one semiannual report, in place of three quarterly 10-Q filings. Combined with an annual report, which means two public financial snapshots per year instead of four. The change is voluntary; companies can stay on the quarterly schedule if they prefer.

SEC Chairman Paul Atkins framed it as overdue modernization, arguing that "the rigidity of the SEC's rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs." The proposal is part of what Atkins called his "Make IPOs Great Again" agenda, aimed at reducing the cost and friction of being a public company.

Banks Are Different

For publicly traded banks, the quarterly reporting rhythm is not just a compliance formality. It is part of how markets continuously monitor banks’ credit quality, as well as their liquidity, market, and operational risks.

Importantly, the proposal would not reduce regulatory oversight. Banks would still report detailed financials to the Federal Reserve, the FDIC, the OCC, and other prudential supervisors, as well as state bank regulators, on a quarterly basis. Bank regulators would continue seeing the system in near real time. But market participants and consumer advocates would not.

That divergence is critical. Banking crises are rarely triggered by regulators lacking information. They are triggered when markets and depositors react to new information, often suddenly, and collectively. The question is not whether regulators know what is happening inside a bank, but rather whether markets have enough information to avoid overreacting when they finally find out.

Who Would Actually Opt In

The impact of this proposal would not be distributed evenly across the banking system. The largest banks such as Bank of America, Citibank, JPMorgan Chase, and Wells Fargo are certain to remain on quarterly reporting. These banks operate under intense bond and stock analyst scrutiny, rely on continuous capital markets access, and benefit from signaling transparency. Their quarterly earnings calls are major market moving events. Opting into semiannual reporting would be seen as a red flag by investors, lenders, and consumer advocates.

Large regional banks, such as PNC Financial Services and U.S. Bancorp, however, face a more nuanced calculation. Most are likely to stay quarterly as well, particularly given that many of us still remember the 2023 banking stress.

The more consequential cohort sits below them: mid-sized regional banks in the $20 billion to $150 billion asset range, institutions like Zions Bancorporation or Valley National Bancorp. These banks face actual cost pressures, thinner analyst coverage, and they often have more concentrated risk profiles. They are the most likely to opt into semiannual reporting. While these banks are not globally systemically important, if any were to fail, they would cause significant challenges to the businesses and consumers they serve.

The Information Gap and What It Produces

Quarterly reporting does more than inform investors. It creates a continuous narrative, a cadence through which management can signal emerging risks, guide investors’ expectations, and allow markets to adjust gradually. Semiannual reporting compresses that process into two releases per year, making it significantly harder for analysts, lenders, and investors to forecast risks that banks may be accumulating.

Instead of incremental updates, markets may receive six months of accumulated deterioration in a single disclosure. That does not reduce risk. It changes its timing and amplifies its release.

Consider a realistic scenario. A mid-sized bank with heavy commercial real estate exposure experiences gradual credit deterioration and deposit outflows over several months. Under the current regime, those trends surface across two quarterly filings, small adjustments that allow investors and depositors to recalibrate. Under a semiannual framework, they remain invisible until they are not, by which point, it is too late for investors to reassess their risks.

When the bank finally reports, the result is not a modest repricing. It is a shock.

The mechanics of that shock are not theoretical. The Silicon Valley Bank collapse in 2023 demonstrated how quickly confidence can evaporate in a digitally connected financial system where billions in deposits can move within hours via mobile banking, long before regulators can intervene.

In a semiannual reporting world, the sequence could unfold rapidly: a large one-day stock drop as markets absorb six months of bad news at once; uninsured depositors moving funds within hours; funding costs spiking as wholesale lenders grow cautious; and contagion spreading to peer institutions particularly those also reporting semiannually where, without recent disclosures, investors cannot distinguish strong from weak.

The Signaling Trap

The proposal also introduces a subtler but powerful market dynamic: self-selection as a signal.

If some banks report quarterly and others switch to semiannual, the choice itself becomes meaningful. Investors and lenders may read semiannual reporting as a sign of lower transparency or higher underlying risk even if management's intent might simply be cost reduction. That perception could create a feedback loop in which stronger banks maintain quarterly reporting and attract deposits, while institutions that opt for less frequent disclosure could face higher funding costs and greater scrutiny, reinforcing the very concern that drove investors away in the first place.

A rule designed to increase flexibility could inadvertently stratify the banking system along lines of perceived transparency.