Efforts by the Obama administration to overhaul the U.S. health, financial and energy sectors risk undermining a fragile economic recovery, the head of the New York Stock Exchange said on August 18.
Duncan Niederauer, the chief executive of the world's largest stock exchange, told Brazilian business leaders in Sao Paulo that the U.S. economy would be doing much better without the regulatory uncertainty. The return of corporate profits, along with big cash stockpiles, low and stable interest rates and nil risk of inflation in the near-term mean the U.S. equities market is "poised to go higher," he said.
"So then one might ask: Why isn't the market going higher?
"In the U.S., there's still some lingering concerns about sovereign risk in different parts of the world, there's still some concerns in the US corporate sector about continuing policy and regulatory risk," he said.
Health sector reforms pushed through by President Barack Obama's administration, financial sector reforms currently being worked out, and a likely overhaul of the rules governing the U.S. energy sector in the wake of the huge Gulf of Mexico oil spill all contributed to uncertainty, Niederauer said.
"Until the administration's attitude towards business and the response from business is a lot more constructive on both sides, I think that's creating a bit of an offsetting counterweight to all those positive things" underpinning the U.S. recovery, he said.
Niederauer was in Sao Paulo to talk up the advantages of the New York Stock Exchange for companies in Brazil, where an economic boom is underway. "Everyone's guess is that in a few short years it (the Brazilian economy) will probably be the fifth largest economy in the world.
Opportunities in the South American giant's economy will be "accelerated," he said, as Brazil hosts two massive sporting events in coming years: the World Cup in 2014, followed two years later by the Olympic Games. Both "give Brazil a tremendous opportunity to make some of the additional investments that we would all agree it needs to make, particularly in infrastructure," he said.
Copyright Agence France-Presse, 2010
