US firms, Moral Hazard

According to the New York Times as of June 27, analysts of Europe and all countries of world who saw the accounting irregularities pointed out that the shaking one is not WorldCom, but its Americanized management techniques.

This newspaper said that US has been awakened from the illusion of the open and transparency model. Known as a country of an opportunity, US had the invested capital of several billions dollars. But, these amounts have been removed from US”.

Chief of foreign investment of Dresdner Investment Trust said, “Because US is not the best place for the investment any more, investors agreed to its opinions.

Guido Rossi, the former president of Telecom Italy mentioned, “CEO who made a mistake are never shameful. It is a Moral hazard.

According to this newspaper, many Europeans examined that the accounting standard of US is complicated and so it is easy to be fabricated. In addition, as European firms request to report the performance of listed firms from US stocks authorities, CEO concentrates on just the short-term performance and the management has much salary.

US dollar was the lowest value after the lapse of 28 months and US trade deficit has increased. Accordingly, there is the mistrust of US firms.

konihong@donga.com