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Politics : PRESIDENT GEORGE W. BUSH
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To: MKTBUZZ who started this subject7/16/2002 8:37:50 PM
From: DuckTapeSunroof   of 769670
 
"Fraud and deception are thefts of property," Greenspan said. "Unless the laws governing how markets and corporations are perceived as fair, our economic system cannot achieve its full potential."

cbs.marketwatch.com

Greenspan took aim at one aspect of corporate accounting left unaddressed in either the Senate or House bills: stock options.

As he has before, Greenspan said the "perverse" incentives created by stock options were at the heart of the current crisis of confidence.

The later half of the 1990s provided "an outsized increase in opportunities for avarice," he said.

The spread of stock options and shareholding among managers "perversely created incentives to artificially inflate reported earnings in order to keep stock prices high and rising.

But stock options "failed to properly align the long-term interests of shareholders and managers," he said. "The incentives they created overcame the good judgment of too many corporate managers."

..."It is not that humans have become any more greedy than in generations past," Greenspan said. "It is that the avenues to express greed had grown so enormously."

...It's not enough to preach to CEOs to become more honest, Greenspan said. "Even a small increase in the likelihood of large, possibly criminal penalties for egregious behavior of CEOs can have profoundly important effects of all aspects of corporate governance," he said.
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