O'Neill: Corporate reforms will boost investor confidence

Reforms under way to improve corporate accounting standards and hold chief executive officers more accountable for corporate disclosures will boost investor confidence, said US Treasury Secretary Paul O'Neill.

"Changes occurring today in corporate board rooms, on Wall Street, in SEC (Securities and Exchange Commission) rules and in the law will ensure that we overcome today's uncertainties about corporate financial information," he said in remarks to the New York Treasury Securities group.

These changes will ensure that investors "have the confidence they need to allocate capital" efficiently, he said.

It is "critical" for the economy that CEOs operate at "high standards of truthfulness" in attesting to the accuracy, transparency, and completeness of corporate financial statements, he noted.

On Saturday, O'Neill said the stock market had overweighted concerns about corporate transparency in the wake of the Enron, Adelphia, and other scandals. He predicted that the market would eventually reflect solid underlying economic fundamentals.

O'Neill is in New York to highlight the Bush administration's initiatives to reform accounting standards, as Congress considers legislation to increase regulation.

The House of Representatives has approved one bill with Republican support to establish a new regulator to oversee auditors, and ban accounting firms from offering certain consulting services to the companies they audit.

The Senate Banking Committee is today considering competing legislation which would establish stricter regulation of the accounting industry. The SEC separately will release Thursday its own final proposals for creating a new accounting regulatory body.