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Swiss Central Bank Chief Speaks On Restoring Investor Confidence

by Ulrika Lomas, Tax-News.com, Brussels

06 September 2002


Speaking to the Swiss-American Chamber of Commerce recently, President of the Swiss National Bank, Jean-Pierre Roth warned that following the spate of corporate accounting scandals in the US, it will be a long time before trust is restored to the world's markets.

Reporting on Mr Roth's speech to assembled CEOs in Zurich this week, the Swissinfo news service quoted the Central bank chief as observing that until the culture whereby executives are under pressure to maximise short-term profits is re-examined, the temptation to employ dubious accounting practices and to manipulate the market will continue.

'As long as the rules of the game prize short-term gain over long-term earnings stability, the temptation to cheat by manipulating the market will remain strong,' he explained, adding that the fallout from recent events in corporate America has 'twitched the nerves' of the markets, both domestic and international.

'This setback in investor confidence undermined the required trust in financial markets that the right rules are in place and that those rules are being enforced,' the National Bank President told Chamber of Commerce members, stressing that although it is 'vital' for companies, the government, and the public to work together to eradicate any weaknesses in legislation and regulatory oversight, the process of restoring investor trust will not be complete any time soon.

'While the issues are complex, the list of proposed solutions is long. This all suggests that consensus and reform will not be achieved overnight,' he concluded.


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