Stop doing what you weren't supposed to be doing but may have been doing anyway. And tell everybody what you're doing in the future.

This is a loose summary of what a Securities and Exchange Commission proposal on Friday would mandate for banks engaged in short-term funding transactions designed to obscure quarter-end leverage.

It will lead to heightened disclosure surrounding some important risk gauges — a burden that, depending on the final details, could motivate banks to avoid some types of short-term financing. But few expect that its ultimate interpretation would be so onerous as to goad banking companies into marshaling all-out opposition.

"The commission went out of its way to say that it did not view such transactions as inherently bad," said Michael Scanlon, a partner in Gibson Dunn & Crutcher's financial services practice in Washington. "But given the extent of disclosure that will be required around intraperiod financing, it could disincentivize firms from using some of those tools."

Some of the industry's harsher critics on financial reporting matters raised doubts as to the ultimate efficacy of a rule, though they welcomed the prospect of greater disclosure. And even some of the SEC commissioners who approved the proposal suggested that it wasn't an ironclad obstacle to gussying up complicated financial balance sheets.

Financial institutions will continue "to look for the new repo 105," Commissioner Luis Aguilar said in brief comments before a unanimous vote, referring to a type of transaction that the now-defunct Lehman Brothers Inc., and other institutions, used to blur the extent of their leverage. "What are the consequences for those that dress up balance sheets? Rules on the books are not enough."

The proposal would prohibit banks from entering into finance agreements solely "designed to mask" their financial position. It also would require banks to reveal both their maximum and average assets, in addition to their period-end assets, each quarter. Elements of the proposal could apply to nonfinancial firms as well.

A growing number of analysts, regulators, and industry players have concluded that widespread gaming of risk limits and disclosure rules contributed to the financial crisis — but did not die with it. By temporarily parking bank assets off balance sheet, with the help of trading partners, companies like Lehman managed to obscure the degree of risk they had taken on, rendering them more vulnerable to stress than they appeared.

More recently, major commercial banking companies drew scrutiny for using different tactics for reducing their assets shortly before quarter end. Companies like Bank of America Corp. and Citigroup Inc. consistently reported average assets each quarter well in excess of their quarter-end balance. After press reports of the discrepancy, and an SEC review, Citi disclosed that it had misclassified more than $9 billion in repo loans and Bank of America reported that an internal control error had caused it to book certain transactions as sales rather than loans.

Both companies maintained that they had appropriately presented their financials to investors, however. And Bank of America said that the misclassification was purely an accounting issue, which did not affect their Tier 1 capital ratio nor their appropriate implementation of end-of-quarter leverage restrictions.

"I would say that our trading desks have both period-end limits and average limits," said B of A spokesman Jerry Dubrowski. "It's their decision to increase [positions], knowing they have to conform to it at the end of the quarter. You can't stray too far from the center."

Bank of America is reviewing the SEC's proposal, but does not yet wish to comment on it, Dubrowski said.

If rigorous enough, said Francine McKenna, an accounting consultant who blogs at re: The Auditors, the disclosure the proposal would require might yield more clues as to how banks are managing their balance sheets.

"Any investigator knows it's better to ask an open-ended question," she said. "Instead of saying, 'Do you do repo 105?' you ask them how they're financing assets and if they change that on a quarter-end basis."

A broad scope for the rule — coupled with fast, public and company-specific enforcement — is essential to restoring integrity to financial accounting, McKenna said.

But McKenna said she expected companies would seek to shift the eventual implementation of the proposal toward prohibitions of concrete acts — leaving them maximum wiggle room on short-term financing matters. Banks "want the rules to be specific, and they want their advisers to help them get around them," she said.

Scanlon, meanwhile, said it was hard to judge whether a rule like the SEC's proposal would have prevented Lehmanesque balance sheet management. But the rule could potentially change some institutional behavior if it "tamps down the flexibility of short-term financing vehicles that has appealed to banks," he said.

The proposal may be more about addressing a mismatch between SEC and regulatory reporting than such grand topics, he said. "The way the SEC's disclosure rules are set up has historically been focused on the picture at the end of the period," he said. "What bank regulators have looked at is, what are the averages through the period. That's what this proposal is doing — bringing in some of that to [the SEC rules] to give more than just one snapshot."