* Bank regulators say systemic firm list will be public

* Geithner says won’t publish list, cites moral hazard

* Geithner concedes market will figure out systemic firms

WASHINGTON, Oct 29 (Reuters) - U.S. regulators on Thursday scoffed at the administration’s plan to not publicly identify financial firms the government considers “systemic,” saying such a list cannot remain under wraps for long and federal laws could mandate disclosure.

“It’s likely that most, if not all, of the institutions so identified would eventually be known to the public,” said Federal Reserve Governor Daniel Tarullo, to the House Financial Services Committee during a hearing on systemic risk.

“While there is a reason to try to avoid an increase in moral hazard, we should probably be realistic here about what will and won’t be known.”

The Obama administration, in draft legislation released on Tuesday, proposed that there be no public list, the thinking being that listed firms could be perceived as too big to fail.

U.S. Treasury Secretary Timothy Geithner even acknowledged that the public will know who these firms are, but said the government act of publishing such a list could send the wrong message.

“What you don’t want to do is, by identifying a list of companies that are going to be held to tougher standards, create an expectation the government will step in and protect them if they screw up,” he said at the same hearing.

Under the administration’s proposal, large and complex financial firms would be subjected to higher capital and liquidity standards.

They would also get closer scrutiny from regulators and could be subjected to government-led dismantling that would force losses on shareholders and creditors, if a firm became unstable.

The so-called resolution authority is designed to avoid long-term government bailouts like the ones extended to troubled insurer American International Group AIG.N, or the massive market disruption that followed the failure of investment bank Lehman Brothers last year.

Sheila Bair, chairman of the Federal Deposit Insurance Corp, said there is little reason to keep a list of systemic firms private. She said a robust resolution authority would impose the necessary market discipline.

“At the end of the day I’m not really sure it’s realistic to try to keep this confidential, and in the end they may be very well required to disclose this material under the SEC rules,” Bair said, referring to disclosure requirements from the Securities and Exchange Commission.

Comptroller of the Currency John Dugan also acknowledged, “I think one way or another, it’s going to be hard not to disclose, in some way shape or form, who they are.”

Geithner tangled multiple times with lawmakers on Thursday over whether the list of systemic firms would be kept private or made public.

Republican Representatives Spencer Bachus and Randy Neugebauer repeatedly criticised Geithner, saying they were confused how such a list could be kept hidden from potential investors and creditors.

“I just want to know, are we going to disclose the companies or not?” Neugebauer said.

Geithner conceded that the draft legislation tried to strike a balance between the market’s right to know the standards to which firms are going to be held, versus the need to not send out the wrong message that these firms would be protected by the government.

“I am sure for the reasons many of you said, they will be disclosing the regime they’re operating under to their creditors, their equity holders. Analysts will know. And it’ll be clear how much capital they’re holding,” Geithner said. (Reporting by Karey Wutkowski)