Treasury Secretary Henry Paulson, left, moderarted two panels Tuesday morning in Gaston Hall on the state of market competitiveness. The panels featured many notable U.S. finance experts, including former Federal Reserve Chairman Alan Greenspan, right.
Some of the biggest names in American finance met in Gaston Hall on Tuesday for a daylong conference on the competitiveness of the U.S. capital market.
Participants in two morning panels included Mayor Michael Bloomberg of New York (R), the founder of Bloomberg L.P., billionaire investor Warren Buffett, former Federal Reserve chairmen Alan Greenspan and Paul Volcker, former treasury secretary Robert Rubin and investment tycoon Charles Schwab.
Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Christopher Cox moderated the panels, which discussed the state of market competitiveness in public policy and business.
Despite the serious subject matter, the tenor of the event was informal. Panelists called each other by familiar names and joked throughout both panels.
One point of contention that arose during the discussion was the Sarbanes-Oxley Act. Passed in 2002, the law added additional oversight and penalties to prevent fraud after a series of well-publicized corporate scandals, such as those at Enron and WorldCom Corporations. A number of panelists complained that the law has created excessive government regulation, and restricts the market.
Rubin, who currently serves as director and chairman of the executive committee of Citigroup, Inc., said that corporate executives spend much of their time at meetings navigating corporate bureaucracy.
“You will conclude that a lot of what happened [at such meetings] served no purpose,” said Rubin.
In keeping with the relaxed attitude of the event, Buffett, known as the “Oracle of Omaha” for his investment prowess, likened the new stringent regulation of markets following the corporate scandals to a golfer who overcompensates for a slicing golf shot.
“The world was told to aim a little right to atone for those out-of-bound shots in the 1990s,” Buffett said.
James Dimon, chairman and CEO of JPMorgan Chase & Co., said that the increase in litigation in the United States inhibits market competition. Dimon said there is much corporate litigation that is frivolous and does not benefit society as a whole.
“Personally, I think class action suits are a crapshoot. The only real winners are the outside lawyers striking at the heart of America,” Dimon said.
In response, Buffett joked, “I’d sue Jamie because I think he’s ready to settle.”
But Ann Yerger, executive director of the Council of Institutional Investors, defended such suits, saying that they have helped reestablish citizens’ trust in the system after the disillusionment caused by recent outbreak of high-profile white-collar crimes.
“I think that we can’t forget where we were five years ago. We have stepped up in very important ways to restore confidence. There was a great disappointment in boards of directors,” Yerger said.
“Some of the stuff that’s been going on in recent years were outrageous stuff and they should go to jail and they did go to jail,” Greenspan added.
Several panelists noted the need for strong ethical guidelines in the governing of both large corporations and the markets in general.
“It’s about balance and judgment. . There’s no question you’ve got to have both. You have to have principles and you have to have rules,” Dimon said.
