home > by publication type > news briefings > News Brief: Former SEC Chairmen Point to Global Regulatory Convergence
Email
| Author: | Robert McMahon |
|---|
February 22, 2006
Council on Foreign Relations
[NOTE: This is a news brief of a February 22, 2006, meeting at the Council on Foreign Relations.]
NEW YORK — Four former chairmen of the U.S. Securities and Exchange Commission have welcomed ongoing moves toward greater global convergence on market regulatory standards, saying they are key to the success of U.S. investors.
The four—Richard Breeden, Arthur Levitt, Harvey Pitt, and William Donaldson—represent the four previous chairmen of the U.S. market regulatory body dating back to 1989. At a panel discussion hosted by the Council on Foreign Relations in New York, they largely agreed that convergence on regulatory issues such as accounting standards was important for U.S. investors and U.S. financial markets alike.
Arthur Levitt, who headed the SEC from 1993 to 2001, stressed the move toward convergence on international accounting standards was a "natural, evolutionary process" and does not amount to a sellout of U.S. principles. While not pressing for a single accounting standard, Levitt said that at a time of rapidly globalizing electronic market systems, convergence on standards will help ensure U.S. investors are protected wherever transactions take place. At the same time, some panel members urged caution in response to concerns that an increasing number of companies are choosing to list their shares on stock markets outside the United States to avoid rigorous U.S. listing requirements.
Richard Breeden, SEC chairman 1989-93, said the danger of U.S. exchanges losing companies to foreign markets has been exaggerated. "The U.S. capital market is still the most attractive market in the world and we can keep it that way if it remains attractive to investors," Breeden said. That effort, he said, must involve regulations—such as those required by the 2002 Sarbanes-Oxley legislation—to ensure major corporations issue reliable financial statements.
The most competitive markets will remain those setting the highest standards of disclosure, said Harvey Pitt, the SEC chairman from 2001 to 2003. Pitt said market regulators worldwide are working much more closely together and that a global regulatory system is already increasing and elevating standards.
Saying "globalization is a discipline on all of us," Breeden added that the role of commissions like the SEC is to balance between imposing rules some companies may see as burdensome, with maintaining quality in capital markets.
Panelists also expressed broad concern about politicization of financial markets, saying it must be up to individual investors to decide whether they support companies doing business with unsavory regimes.
To order Task Force reports, Council Special Reports, and Critical Policy Choices, please call, fax, or order online from our distributor, the Brookings Institution Press: phone +1.800.537.5487, fax +1.410.516.6998.
For information on other reports that are not for sale, or for general publications information, please call +1.212.434.9516 or email publications@cfr.org.
Start-Up Nation addresses the trillion-dollar question: How is it that Israel—a country of 7.1 million, only sixty years old, surrounded by enemies— produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada, and the UK? With the insights of geopolitical experts and investors, the authors examine this nation’s adversity-driven culture to answer this question and offer prescriptions for a global economy on the rebound.
In Forces of Fortune, Vali Nasr presents a paradigm-changing revelation that will transform the understanding of the Muslim world at large. He reveals that there is a vital but unseen rising force in the Islamic world—a new business-minded middle class—that is building a vibrant new Muslim world economy and that holds the key to winning the cold war against Iran and extremists.
In Cuba: What Everyone Needs to Know, Julia E. Sweig presents a remarkably accessible portrait of Cuba's unique place on the world stage over the past fifty years, including its internal politics, its often fraught relationship with the United States, and its shifting relationship with the global community.
Complete list of CFR Books
The report of this bipartisan Task Force of distinguished leaders and experts represents a strong consensus on the importance of repairing America's immigration policy. It makes the case that maintaining America's political and economic leadership depends on attracting talented and hard-working immigrants, and on securing the country's borders in a smart, effective, and humane way.
This report finds that nuclear weapons will remain a fundamental element of U.S. national security in the near term, and makes recommendations on how to ensure the safety, security, and reliability of the U.S. deterrent nuclear force, prevent nuclear terrorism, and strengthen the nuclear nonproliferation regime.
About Independent Task Forces at CFR
Complete list of Task Force reports
Identifying international threats and acting on them may be the most difficult job for U.S. policymakers. This report
provides an actionable road map for managing international threats before they erupt into crises and makes a strong case that preventive action is not a luxury but a necessity.
For more than a decade, the United States has mostly watched from the sidelines as Asian countries organize themselves into an alphabet soup of new multilateral groups. In this report, the authors review the relationship between pan-Asian and trans-Pacific institutions and suggest policy guidelines for a new U.S. approach to this new Asian landscape.
Complete list of Council Special Reports
To request permission to reprint or reuse CFR material, please fill out this permissions request form (PDF), referring to the instructions on page 1.
Copyright 2009 by the Council on Foreign Relations. All Rights Reserved.