Bernanke Says SOX ‘Worthwhile’
Monday, February 19th, 2007Feb. 15, 2007 (SmartPros) — In the question-and-answer session following his testimony before the U.S. Senate Banking Committee on Wednesday, Federal Reserve Chairman Ben Bernanke said Sarbanes-Oxley regulation is "worthwhile to keep."
"If you take Sarbanes-Oxley as an example, to the extent that Sarbanes-Oxley appropriately balances disclosures and governance against the costs of achieving those disclosures and governance, I think it's worthwhile to keep even if there's some short-run tendency for firms to run away from that," said Bernanke. "Because the investor wants that protection, and ultimately the investor will reward firms that list on exchanges that have appropriate, adequate protections, such as a well-designed Sarbanes-Oxley."
Bernanke added that the costs associated with any financial regulation raise questions.
"There are always concerns about Sarbanes-Oxley, about Basel II, about the regulatory structure, about the securities litigation, about [the Committee on Foreign Investment in the United States, and] many other things that we could point to, where legitimate questions can be raised about whether the costs of those regulatory schemes exceed the actual benefits to investors and to others of implementing them," he said.
Bernanke's semi-annual testimony before Congress forecasted modest growth in the economy this year, and said inflationary pressure appear to be waning.
Bernanke is scheduled to give testimony today before the House Financial Services Committee.
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