Collected works or original art by David Israel Litan

Having Faith: The Collected Art of David Israel Litan

Robert E. Litan

David Litan

A few years ago, Americans held out their systems of corporate governance and financial disclosure as models to be emulated by the rest of the world. But in late 2001 U.S. policymakers and corporate leaders found themselves facing the largest corporate accounting scandals in American history. The spectacular collapses of Enron and Worldcom —as well as the discovery of accounting irregularities at other large U.S. companies —seemed to call into question the efficacy of the entire system of corporate governance in the United States. In response, Congress quickly enacted a comprehensive package of reform measures in what has come to be known as the Sarbanes-Oxley Act. The New York Stock Exchange and the NASDAQ followed by making fundamental changes to their listing requirements. The private sector acted as well. Accounting firms —watching in horror as one of their largest, Arthur Andersen, collapsed after a criminal conviction for document shredding —tightened their auditing procedures. Stock analysts and ratings agencies, hit hard by a series of disclosures about their failings, changed their practices as well. Will these reforms be enough? Are some counterproductive? Are other shortcomings in the disclosure system still in need of correction? These are among the questions that George Benston, Michael Bromwich, Robert E. Litan, and Alfred Wagenhofer address in Following the Money. While the authors agree that the U.S. system of corporate disclosure and governance is in need of change, they are concerned that policymakers may be overreacting in some areas and taking actions in others that may prove to be ineffective or even counterproductive. Using the Enron case as a point of departure, the authors argue that the major problem lies not in the accounting and auditing standards themselves, but in the system of enforcing those standards. Rather than attempting to craft a single set of accounting and reporting standards for all companies throughout the world, the authors advise policymakers to allow competition between the two major sets of standards: Generally Accepted Accounting Principles and International Financial Reporting Standards. The authors also believe that the corporate disclosure system needs to be updated to reflect changes in the underlying economy. In particular, they recommend new forms of disclosure for a variety of nonfinancial indicators to better enable investors and analysts to ascertain the source and nature of intangible assets. They also urge policymakers to exploit the advantages of the Internet by encouraging more frequent financial disclosures in a form that will make them more widely accessible and more easily used.

Following the Money: The Enron Failure and the State of Corporate Disclosure

Business & Money

Michael Bromwich

Alfred Wagenhofer

Biography & History

Brookings Institution Press

Throughout the 1990s, numerous financial crises rocked the world financial sector. The Asian bubble burst, for example; Argentina and Brazil suffered currency crises; and the post-Soviet economy bottomed out in Russia. In Financial Crises, a distinguished group of economists and policy analysts examine and draw lessons from attempts to recover from past crises. They also consider some potential hazards facing the world economy in the 21st century and discuss ways to avoid them and minimize the severity of any future downturn. This important new volume emerges from the seventh annual conference on emerging markets finance, cosponsored and organized by the World Bank and the Brookings Institution. In the book, noted experts address the following questions: How effective were post-crisis policies in Latin America, Eastern Europe, and East and Central Asia? Where do international financial markets stand ten years after the worldwide debt crisis? How can the provision of financial services resume vigorously, yet safely? What are the viable policy options for reducing systemic financial vulnerability? What will the next emerging-market financial crisis look like? Will lessons learned from past experiences help to avoid future disasters? How can nations reform their pension systems to deal with retirement challenges in the 21st century?

Financial Crises: Lessons from the Past, Preparation for the Future

Gerard Caprio Jr.

James A. Hanson

Economics

Trillion Dollar Economists: How Economists and Their Ideas Have Transformed Business

wiley

Capitalismul bun, capitalismul rău şi economia dezvoltării şi a prosperităţii

William J. Baumol

Carl J. Schramm

Polirom

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Books by Robert E. Litan