In guidance issued on Friday, the regulator's Division of Corporation Finance said disclosures by publicly-traded financial institutions have been "inconsistent in both substance and presentation."

It said this could make it harder for investors to discern how much risk the banks are taking, both individually and relative to each other, and how the exposures will affect operating results or financial health.

The SEC urged that banks reveal direct and indirect exposures "separately by country, segregated between sovereign and non-sovereign exposures."

It said they should also provide more details on hedging, through such instruments as credit default swaps, and sums they might need to raise if forced to close out their positions.

"In determining which countries are covered by this guidance, registrants should focus on those experiencing significant economic, fiscal and/or political strains such that the likelihood of default would be higher than would be anticipated when such factors do not exist," the SEC said.

The non-binding guidance was issued about two months after MF Global filed for bankruptcy protection, amid a liquidity crunch spurred by investor and customer worries about its $6.3 billion bet on sovereign debt from Belgium, Ireland, Italy, Portugal and Spain.

MF Global had revealed that exposure in the prior week.

Worries about European debt exposure have also weighed on the stocks of Morgan Stanley (MS.N) and the investment bank Jefferies Group Inc (JEF.N).

The SEC is trying to learn more about some of the more opaque means that banks use to reduce the risk of credit losses, including derivatives and off-balance-sheet financings. This could reduce the threat of further liquidity shortfalls.

An SEC spokesman declined to comment.

Another regulator, the Financial Industry Regulatory Authority, has stepped up oversight of leverage at brokerages after concluding that MF Global had not been fully candid in disclosing its European debt exposure as little as one month prior to the bankruptcy.

Jon Corzine, a former New Jersey governor, stepped down as MF Global's chief executive on November 4, four days after the New York-based company's bankruptcy filing. (Reporting by Jonathan Stempel in New York; Additional reporting by Carrick Mollenkamp in New York and Sarah N. Lynch in Washington, D.C.; editing by Carol Bishopric)

• A Permanent Economic Emergency