Newspaper article The Evening Standard (London, England)

A Golden Opportunity to Grab

Newspaper article The Evening Standard (London, England)

A Golden Opportunity to Grab

Article excerpt

Byline: ANTHONY HILTON

EUROPEANS lobbying furiously against the rash of American regulation passed in the wake of the Enron affair need to learn when to shut up.

Trade and Industry Secretary Patricia Hewitt berated the Americans yesterday, her sidekick Melanie Johnson is seeking to lobby Harvey Pitt, chairman of the American Securities and Exchange Commission, tomorrow and Peter Wyman, president of the Institute of Chartered Accountants, today used the platform of a conference in Brussels to warn that nothing but trouble comes when politicians start dictating to regulators, as they threaten to do in the United States.

Each in his or her own way is seeking exemption from the full impact of these new laws for non-American companies using the American capital markets.

They fear, correctly, that the American legislation is extraterritorial.

They see a time not too far off when the auditor sitting quietly in London will be subject to a raid from the flying squad of the SEC because he is non-compliant with some American rule while happening to audit a company under the SEC's jurisdiction. But my worry is that Pitt might listen to them and soften his position.

The fact is that the current American mood presents a great opportunity for non-American financial markets - Europe in general and London in particular.

In a world of competitive financial markets the two things that will destroy an otherwise successful commercial centre are excessive taxation and heavy-handed regulation. US tax may be tolerable but the American attitude to regulation should give Europe real hope, particularly when - as now - Congress is subject to what Federal Reserve chief Alan Greenspan might call irrational hysteria.

The US has a track record of going over the top with regulation after a period of stock market excess - witness the legislation of the 1930s following the bust of 1929. Seventy years on the popular mood seeks revenge on Wall Street and Congress does what is popular. …

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