July 17, 2002

    WASHINGTON, D.C.    As a senior Member of the House Financial Services Committee, seeking reforms in the wake of the Enron and WorldCom accounting scandals, Delaware Congressman Mike Castle today asked Federal Reserve Chairman Alan Greenspan for his views on the corporate scandals and the need for more companies to follow Coca Cola, Washington Post Company and Bank One in voluntarily expensing stock options.

    "Unfortunately, Warren Buffet cannot sit on the board of every corporation and urge them to count stock options offered to executives as expenses.  Right now, stock options appear as a mere footnotes on financial reports and not as the expenses they truly are," Castle said.  "There is a real issue here and business and the government must find a workable solution to address it and restore investor and public confidence in this area."

    In response to Castle's question, Greenspan expressed his view that corporations should list stock options as expenses and cited the fact that Coca Cola's stock price actually went up as a result of their announcement.   Greenspan said the issue could be addressed by new standards by FASB, the Financial Accounting Standards Board, which would be accepted by business.

    Castle also reiterated his thoughts regarding corporate wrongdoing, saying, "Corporate behavior influences how the public views the stock market.  The average investor doesn't have the time to research all the causes and solutions and they are looking to the bully pulpit, Chairman Greenspan, the President and Congress to lead the way."