The U.S. share of global stock-market capitalization fell to a 17-year low as faster-growing overseas exchanges lured more companies, a group of executives and academics backed by Treasury Secretary Henry Paulson says, Bloomberg reports.
U.S. exchanges held 35% of worldwide equities by value as of September, down from 52% in 2001, the Committee on Capital Markets Regulation said in a report. The group is led by former White House Economic Adviser Glenn Hubbard and ex-Goldman Sachs Group Inc. President John Thornton.
“On a scale of one to 10, with 10 where we need to be, I think we’re at two right now,” says committee director Hal Scott, a professor at Harvard Law School. If rules aren’t changed, “things are going to get worse.”
The appeal of U.S. stock markets has deteriorated significantly in recent years by “any meaningful measure,” the group said. Overall competitiveness declined from historical averages in 12 of 13 measures it used.
In a November 2006 report, the 24-member group recommended that policy makers overhaul securities regulation, including the Sarbanes-Oxley law passed after the collapse of Enron Corp. and WorldCom Inc. Lawmakers should limit liability for accountants, and the U.S. Justice Department should pursue indictments against companies only as a last resort, the group says.