Resources for Sarbanes-Oxley (SOX)

Bush regulatory plan could do more harm than good

www.reuters.com

A White House plan to overhaul the U.S. financial regulatory system could usher in an era of smaller investment returns and capital flight overseas as investors shy away from a tough new market cop.

The Bush administration proposals, unveiled on Monday, have quickly summoned bitter memories of Washington's last big reform binge -- Sarbanes-Oxley. A replay of that episode, which unfolded in 2002 in response to the collapse of Enron Corp, could kick the financial sector when it's down and prolong tight lending conditions, fund managers and market participants said.

The plan, giving the Federal Reserve more oversight powers and combining securities and futures-trading regulators was also seen as ancillary to the problems immediately facing investors: falling asset prices, increased market volatility and a very weak economy.

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