Greenspan goes gamely on

NO ONE could accuse America of being an ageist society. The late Ronald Reagan was sworn in as President of the United States at the age of 69.

Now Alan Greenspan, the man Reagan appointed chairman of the Federal Reserve in 1987, is undergoing nomination hearings for a fifth term at the Fed at 78. If he goes a full term, he will be 82 when he leaves office.

Greenspan's age may not prove an issue during the hearings but it will be a constant worry for financial markets. One of the favourite rumours launched by bear traders when they have stock to unload is that Greenspan has been incapacitated in some way.

It does seem extraordinary in a nation like the US, which has the choice of a dozen Nobel prizewinning economists and huge Wall Street expertise, that Greenspan remains the first preference.

One can understand why President Bush trusts Greenspan. He served Republican administrations before being selected for the Fed by Reagan and is generally seen to have guided America through some extraordinary turbulence from the 1987 stock market crash to the collapse of Long-Term Capital Management.

More recently he spotted the 'irrational exuberance' of the dotcom years but may have been rather slow in calling time.

In his latest confirmation hearings Greenspan studiously avoided predicting what will happen to Fed interest rates even though the markets are convinced that they will be increased from the present 1% on June 30.

Greenspan was as measured and elliptical as ever, talking only of being 'more aggressive' and of removing an 'unnecessary degree of accommodation in monetary policy'.

He did acknowledge that oil was a worry and seemed fearful that the surge in productivity seen in the US lately might be slowing.

Senator John Kerry has said already that if elected President he would want to appoint former Goldman Sachs chairman and Treasury Secretary Robert Rubin to the Fed. But whether he could ever persuade the old stager to make way for the next generation is not clear.

Sykes speaks

IT is hard not to think that yet another report from Labour on how the City should clean up its act is a step too far.

So one viewed Sir Richard Sykes' Tomorrow's Company report with some scepticism. This was especially so given Sykes' autocratic reputation when running Glaxo and the succession of 'fat- cat' payments he has received, including £940,000 in the most recent financial year.

But his bluntness on Britain's savings industry is welcome. Sykes argues that the industry has done itself a terrible disservice through the promotion of 'unrealistic expectations and misleading advertising'. Everyone needs to change in his view - the salesmen, the fund managers, the advisers and the providers.

Labour has been a disaster for the savings culture. It has removed some of the tax breaks for pensions and individual savings accounts and commissioned a succession of reports, from Myners to Sandler, none of which have been fully implemented.

Indeed, it is only now that the Treasury has conceded that it is willing to allow commission charges of 1.5% per annum on new 'kitemarked' stakeholder savings products.

Fund managers come in for criticism from Sykes for failing to act in a concerted way to make their views felt. There is some truth in this. Shell, currently under scrutiny, has been able to put off change because fund managers appear to have differing views of what kind of boardroom reforms need to take place.

When fund managers have acted in unison, as at BT and ITV, change has been rapid. Ironically, one of the companies where a more transparent approach would be most welcome is Glaxo-SmithKline, currently on the rack over its previous suppression of research studies on Seroxat.

What a pity Sykes was not more keen on governance when he was in charge.

Prosser affair

HEADHUNTERS Whitehead Mann have come out fighting over the botched selection of Sir Ian Prosser to be J Sainsbury's future chairman. The firm claims that it gave the Sainsbury nominations committee five candidates and it, not the headhunter, pulled Prosser out of the hat.

Maybe so, but Sainsbury also asked Whitehead Mann to check how Prosser would go down with major shareholders. No problem was the reply.

For Whitehead chief executive Stephen Lawrence now to blame the press for the affair is - to use his own word -'bizarre'.