Cox warns US not to drop accounting rules

Christopher Cox has warned against making a knee-jerk reaction to the financial crisis and bowing to pressure to change accounting standards.

The SEC chairman made the comments as he testified before the House of Representatives' Committee on Oversight and Government Reform in relation to the financial crisis gripping the global economy.

'If we continue to do what we were doing, and just do more of it, we will undoubtedly repeat history. I remember working in the White House in 1987, helping to determine how to respond to a 25% drop in the markets in one day,' said Cox.

'I see the very real similarities to current events -- institutions borrowing short and lending long, housing bubbles in California and Florida, pressure to change accounting rules to give savings and loans time to right their balance sheets. The nation subsequently spent upwards of $150bn to clean up the wreckage.'

In his testimony Cox also said that the SEC would be tougher on company's accounting and auditing.

'In strengthening the role of the SEC,[the watchdog will] build on these traditional strengths -- law enforcement, public company disclosure, accounting and auditing, and the regulation of exchanges, broker-dealers, investment advisers, and other securities entities and products.'