NEW YORK (Bloomberg) — The meltdown of the US subprime mortgage market has the potential to rival the economic aftermath of Enron Corp.'s collapse, with more banks writing off losses in months to come, former Securities and Exchange Commission chairman Arthur Levitt said.

Rising defaults on subprime mortgages have led to about $66 billion of writedowns in the US since June. The impact has spread to Canada, where Bank of Montreal yesterday said debt writedowns, trading losses and other costs cut profit by C$275 million ($276 million).

"I think the writedowns are just beginning," Levitt told a securities conference in Toronto today. "The subprime debacle has undermined investors' trust. Their doubts threaten the stability of the financial system as a whole."

Like Enron, with off-balance sheet special purpose entities that led to its collapse, banks also failed to disclose on their balance sheets the structured investment vehicles holding subprime debt, Levitt said.

"These banks claim these entities were separate," Levitt said. "If so, then why are billions of dollars being spent bailing out these companies? Evidently, they were not as separate as was claimed in their accounting."

Levitt urged the Financial Accounting Standards Board, a panel of certified public accountants that reviews and establishes general bookkeeping practices for US companies, to close a loophole which allows the banks to keep the holdings off their balance sheets.

On a separate issue, Levitt said Canada would benefit from having a national securities regulator, instead of 13 provincial and territorial agencies that monitor the industry.

"You'd have a lot to gain with a single regulator," he told the audience.

Levitt is an adviser to private-equity firm Carlyle Group Inc. and is a board member of Bloomberg LP, the parent of Bloomberg News.