Accountability interview part II

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Audio Transcript:

MARCO WERMAN: I'm Marco Werman. This is The World. So ? before the break, reporter Ken Belson of the New York Times was telling us about the culture of corporate accountability in Japan. It sounded a bit more stringent than in America. Mr. Belson says that's also true in South Korea and China ? especially China.

KEN BELSON: We've seen in China, with some of the food scandals and most recently with the earthquake last year and the destruction of certain schools, and the shoddy construction of them, China doesn't leave any doubt. There is a court case, but people are executed. And I think it's a rather definitive statement that the government tries to make. In Korea, it's a bit of a hybrid. You see a little bit of the sort of nuanced ?say goodbye but stay within the nest? that you see in Japan, but you've seen executives from the biggest industrial combines hauled off to jail, without neckties, on public TV. There is more of a Chinese inclination towards legal means here. In Japan, unless really somebody's done something wrong, they rarely are trotted in front of the cameras like that. Mind you, this all happens, it's just rare you see CEOs hauled away for fraud at a company level.

WERMAN: It will be interesting to see what happens in India, where CEOs of the huge Satyam Computer Services Company are facing allegations of a massive accounting fraud. I mean, cash on a scale never seen before anywhere in the world. Do you have any thoughts on India's approach to corporate accountability and what might happen with the Satyam episode?

BELSON: Well, what's interesting there is they have a different legal system that they inherited from the British. So you may see sort of a more European response than in Japan. Certainly in Japan, where they have a legal system that looks like ours in name but operates much, much differently. So we may see a long trial and a judge may make a decision on this fellow's future. What's interesting here is he came forward and admitted his sins, and I think that also gains points in other countries, too. I think starting long legal suits in parts of Asia really don't get you a lot of points. In America, you try and exhaust all your legal avenues. In Asia, that's seen as somebody who doesn't want to admit what they did.

WERMAN: It's interesting. I don't know if you know this, but President Obama last night in his press conference made reference to Japan's Lost Decade because they waited too long to figure out how to fix their economy in the early ?90s. I'm just wondering if you saw any lessons in that era back in the 90s for the US right now.

BELSON: I heard that, his pronouncement there. And the Japanese in fact call it the Lost Decade, so it's not something anyone in America pinned on the Japanese. And I think it's interesting that we are now referring to the Japanese that way, partly because we've done more in ? the government collectively, both administrations have done more in a year than the Japanese did in about eight years after their bubble burst, starting in 1990. So that's interesting in and of itself. I think, although people are urging even faster passage, for example of the stimulus bill, Americans are already moving much, much quicker than Japan ever did. And it was only after the Yamaichi shock and a couple of banks went out of business not long after that that there was a palpable fear. So they set up things called Bridge banks, which is I guess what we have. They started pooling debts and government started securitizing them. Interest rates went to zero. But it took many years to get to that point. So I think we've already learned from the Japanese, whether it was intentional or not, our administration ? or both administrations really learned quickly you have to mobilize money, government has to put its name behind things to restore trust. Otherwise things will spin far out of control.

WERMAN: New York Times correspondent Ken Belson, thanks very much for your time.

BELSON: Thank you.