Mario Monti and his “Imported from Brussels” government was sworn in today in Italy. So let the “reforms” begin there. Meanwhile, Italian bond yields are still right at 7%, and yields rose elsewhere throughout the Eurozone even though the European Central Bank started purchasing.

By the way, the ECB’s purchases, under their own standards and public statements, are illegal under the Treaty of Lisbon:

It’s true that the Treaty of Lisbon expressly forbids the European Central Bank from buying up debt instruments directly from countries like Italy and Spain. But, says Richard Portes of the London Business School, there’s nothing to prevent the central bank from buying up Italian and Spanish bonds on the secondary market from other investors.

“If that’s illegal, then officials should already be in jail,” says Portes. “Because they’ve been doing it sporadically since May of 2010.” The problem is that the bank’s current erratic purchases only seem to be creating more uncertainty in the market. “Right now,” says Portes, “nobody’s buying in that market except the ECB.”

What the ECB won’t do is say out loud that they will purchase as many bonds as it takes from sovereigns to get their yields down to a manageable level. That would reflect acting as the lender of last resort, and the ECB would much rather fret about inflation in a zone of countries under a depression, apparently.

The problem for the United States is that there’s no understanding of how much exposure US financial firms have to the expected fallout, especially if there’s a default event. JPMorgan Chase and Goldman Sachs announced their overall derivatives risk from sovereigns today, but wouldn’t pinpoint how much of that comes from Italy or Spain:

JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally.

Just don’t ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS.

As concerns mount that those countries may not be creditworthy, investors are being kept in the dark about how much risk U.S. banks face from a default. Firms including Goldman Sachs and JPMorgan don’t provide a full picture of potential losses and gains in such a scenario, giving only net numbers or excluding some derivatives altogether.

Maybe they hold no risk. Maybe they hold more than they can ever deal with. We have no idea.

Fitch, the ratings agency, put out a report on US bank risk to the European crisis, and stocks tumbled as a result. In this age of global interconnectedness, and considering that at the root, this is a banking crisis in Europe, there’s no way to really avoid that risk, no matter what the risk officers say.

The ECB’s reticence is a problem for the world.