PARIS, Feb 25: US economist Joseph Stiglitz, whose work on market economics won him a Nobel Prize last year, slammed the Enron scandal as “a capitalism by collusion” in the French financial newspaper Les Echos on Monday.

The accounting irregularities and electoral campaign financing that preceded the biggest corporate bankruptcy in US history showed that “we need better standards and more efficient laws,” Stiglitz said in an interview.

“Investors want to be certain that the information they receive sufficiently reflects the economic situation of a company. In the current regulatory and legal framework, investors have no guarantees that’s what they’re getting,” he said.

Enron, an energy trading group that was once the seventh largest US company and which now is the subject of congressional and criminal probes for allegedly massaging its books and misleading investors while pumping funds into the main US political parties, underlined the need for reforms, Stiglitz said.

“Most of Enron’s operations were legal. Its auditors declared that its core practices observed the law and that thousands of other companies did similar things. They were right — and that’s exactly the problem,” said the one-time chief economist for the World Bank and advisor to former US president Bill Clinton.

“The major problem of our time consists of finding a fair balance between government regulation and market forces.”

The ties between Enron and the White House were of particular concern.—AFP