Fed chair: ‘Greed’ behind scandals

Greenspan says verification from all CEOs unnecessary

? Federal Reserve Chairman Alan Greenspan, after condemning business executives who mislead investors, said Wednesday he doesn’t believe the CEOs of all publicly held companies should be required to verify the accuracy of company finances with federal regulators.

It would be OK if public companies wanted to provide the information voluntarily to the Securities and Exchange Commission, Greenspan told a House committee. But he also indicated that they should not be forced to do so.

The SEC has asked roughly 1,000 top CEOs to certify that their financial statements are accurate.

In his written testimony to the House Financial Services Committee, Greenspan reiterated his view that accounting problems stemmed in part from corporate greed and blamed that for undermining investor confidence in corporate America.

He had told a Senate panel earlier that “an infectious greed seemed to grip much of our business community.”

Greenspan also said he wasn’t terribly worried by the prospect that more U.S. corporations might revise earnings downward.

“I do believe there are going to be significant restatements and I agree with you that the number that are going to be restated up won’t take you very long to read,” Greenspan said.

But those restatements aren’t likely to damage the U.S. economy, he said. “I’m not concerned about any impact,” Greenspan said. “If we get a lot of restatements, which I presume we may very well, I’m not sure that’s all bad.”

Greenspan said it wasn’t critical for Congress to complete action on a package to combat corporate fraud before it breaks for a summer recess. But he cautioned: “If you wait too long, you’ll probably lose the window of opportunity.”