Financial Confidence Requires Transparency, Not Chicanery
William Cohan, whose book (House of Cards) on the origins of the financial crisis I am currently enjoying on my new Kindle, has an excellent and informative column for The Financial Times in which he warns--convincingly--that the recent profit numbers from giant banks like Goldman Sachs, Citigroup and Bank of America might not be quite as exciting as they first appear.
In fact, his column suggests that it's business as usual on Wall Street, which means that companies continue to use misleading numbers to create a false impression of robust financial health.
Says Cohan: "A true return of profitability on Wall Street will come with the return of public confidence in the way it does business. Concepts such as honesty and transparency are key, not a bunch of accounting gimmicks designed to manufacture profits and send markets soaring. The public will remain sceptical of the recovery--and the return of the investment banks--until then."
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