U.S. May Lose Its Place as World's Finance Leader, Study Says By Yalman Onaran Jan. 22 (Bloomberg) -- The U.S. will lose its place as the world's leading financial center in the next decade without legal and regulatory changes, a report commissioned by New York Mayor Michael Bloomberg and Senator Charles Schumer found. The report suggests exempting some non-U.S. companies from the Sarbanes-Oxley corporate-governance regulations. The findings are based on interviews with 50 chief executive officers and a survey of 305 other executives in the financial-services industry, conducted by McKinsey & Co. The report is the latest volley from businessmen and politicians seeking to ease the U.S. regulatory framework on concern it's eroding the country's competitive advantage. U.S. Treasury Secretary Henry Paulson, NYSE Group Inc. CEO John Thain and the U.S. Chamber of Commerce have made similar recommendations in the last six months. ``We can no longer take our preeminence in the financial- services industry for granted,'' Bloomberg and Schumer wrote in a letter accompanying the report, which urged eliminating regulatory duplication and inefficiencies. ``We must do both while ensuring that we maintain our strong protections for investors and consumers.'' All the criticism so far has singled out Sarbanes-Oxley corporate-governance regulations as pushing companies away from U.S. markets. The critics have blamed the law, passed in 2002, for the decline in U.S. public share sales. The U.S. accounted for 20 percent of all IPOs last year, down from 35 percent in 2001, according to the Financial Services Forum, which represents the country's largest banks and insurers. Sarbanes-Oxley Exemptions The Bloomberg-Schumer report urges the U.S. Securities and Exchange Commission to use its powers to limit legal liability for non-U.S. companies listed in U.S. markets. The report also suggests foreign companies that fall under the jurisdiction of SEC-approved regulators in other countries be kept exempt from Sarbanes-Oxley requirements. Companies will spend $6 billion this year complying with the rules, according to a study by Boston-based AMR Research released in March. The Business Roundtable, which represents executives from the U.S.'s biggest companies, says 40 percent of its members will spend more than $10 million each complying with Sarbanes- Oxley. House Financial Services Committee Chairman Michael Oxley and Democratic Senator Paul Sarbanes drafted the legislation in the wake of wake of corporate scandals at Enron Corp., which wiped out more than 5,000 jobs and $1 billion in employee retirement savings, and WorldCom Inc., which cost shareholders and bondholder as much as $40 billion. The Bloomberg-Schumer report also focuses on legal costs, which the authors say are a major detraction from listing in U.S. markets. Arbitration should be allowed as an alternative method of settling disputes instead of litigation, the report says. Bloomberg is the founder and majority owner of Bloomberg News and parent Bloomberg LP. To contact the reporter on this story: Yalman Onaran in New York at yonaran@bloomberg.net . Last Updated: January 22, 2007 09:08 EST
Bloomberg and Schumer..........hMMMMMMMMMMM. Wonder what this is about. So, we want LESS regulation. regulation is the problem. I've had several conversations with a journalist you all would know, and he agrees with me. They are crooked, and they (Wall St.) want it all. Deals are leaving because the World knows the in guys on the Street will destroy you for profit. Hell, Cramer brags about it, probably trying to cover his ass for the stuff he's done. Clean up the business, or they'll be no business.
Right... free markets without responsible regulation facilitates corporate grandiosity and abuse. Globalization has it's adverse affects on U.S. corporate interests too.. like competition.
Regulation is all very well if everyone is playing by the same rules - but they aren't. Markets in Asia particulary are growing at astonishing rates and their regulations are often more limited. Do you really think that foreign companies will simply roll over and let U.S. regulatory agencies regulate them? Fat chance. Competition stagnates under over regulation. Just look at France Edward _________________________________ http://lordtedders.blogspot.com
From where I see it. Regulation should be minimum... and it should never interfere in market efficiency... I believe the gov shouldn't even mess with monetary supply... it simply shouldn't mess with the market... when it does well... look at 1929.
Responsible regulation is the antithesis of abuse of power and chaos. Generally and nationally... Minimal and Responsible regulation... yes. Effective and Efficient... yes. But, a free market without it is a recipe for corporate power consolidation and abuse, which inherently is the antithesis of a free, fair, and competitive market. Remember the "Robber Baron" years? More specifically on global competition... How could we ever expect to compete with countries that "cheat" by condoning corporate abuses, such as human rights and environmental neglect? -kt
The problem with responsible regulation is that it looks good on paper... and that's about it. Why? Because it has to be enforced by beurocrats [you know those boring looking guys who think cutting expenses is a bad thing...] Simple. Don't buy from them.
Somewhat ironic seeing this thread whining about too much regulation right next to the "NYSE Fines Seven Specialists" thread