Things Paulson Can Do To Boost U.S. Markets
It is disappointing to read that someone as highly regarded as U.S. Treasury Secretary Henry Paulson has chosen to lend his good name to the opportunistic campaign to repeal essential investor protections adopted in the wake of recent massive accounting frauds ("Paulson Pulls for U.S. Markets," Money & Investing, Oct. 23). Make no mistake about it, these efforts are designed to do far more than "tweak" the rules. If that were all the Financial Services Forum, the U.S. Chamber of Commerce and their allies had in mind, they would simply congratulate the Securities and Exchange Commission and the Public Company Accounting Oversight Board for having the job well in hand and move on to other issues.</br></br>Backers of these efforts repeatedly cite the declining number of major foreign initial public offerings on U.S. markets as evidence that investor protections must be scaled back. As they surely understand, however, the decline in foreign listings on U.S. exchanges long predates the passage of Sarbanes-Oxley. A variety of factors contributed to the trend, not least U.S. economic policy over the past quarter century that actively encouraged globalization, technological advances that made globalization possible and investment-banking fees that are nearly twice as high for U.S. IPOs as they are on major European exchanges. In fact, foreign listings on U.S. exchanges bottomed out earlier this decade following the bursting of the tech- stock bubble, 9/11 and the massive accounting scandals that led to the passage of SOX. Since the implementation of SOX, the number of foreign companies listing in the U.S., the amount of money they have raised here and the U.S. share of the global IPO market have all grown.</br></br>If Secretary Paulson is looking to boost U.S. competitiveness, there are several pressing problems that are well within the purview of the Treasury secretary. Chief among them are the government's lack of fiscal discipline and burgeoning budget and trade deficits, factors the World Economic Forum identifies as central to a decline in U.S. economic competitiveness. Efforts to tackle these problems are far more deserving of Secretary Paulson's support than the poorly cloaked special interest attack on investor protections he has unaccountably chosen to back.</br></br>Barbara Roper</br></br>Director of Investor Protection