Former Treasury Secretary Lawrence H. Summers warned that President Donald Trump's proposal to eliminate quarterly corporate earnings reports could weaken accountability and transparency in U.S. markets.
Summers Pushes Back On Trump's Idea
In a post on X, formerly Twitter, Summers drew a sharp analogy.
"Students don't like grades and many business leaders don't like quarterly earnings reports. The reason is the same. Being monitored and accountable for results is painful. The President's idea of eliminating quarterly reports will cause companies and the markets to function less well."
His remarks came after Trump renewed his call for the Securities and Exchange Commission to move from quarterly to semiannual reporting, arguing it would save companies money and allow executives to focus on long-term growth.
"This will save money, and allow managers to focus on properly running their companies," Trump wrote on Truth Social, contrasting U.S. practices with China's "50 to 100 year" business outlook.
See Also: Donald Trump Lauds Economic Success, Yet Public Sentiment Tells A Different Story
SEC Reviews Trump Proposal
The SEC, led by Chairman Paul Atkins, is reportedly prioritizing the issue at Trump's request. If enacted, the change would bring the U.S. more in line with Europe, where quarterly reporting mandates were dropped in 2013 and 2014, though many companies still report four times a year voluntarily, reported the Wall Street Journal.
The SEC has required quarterly disclosures since 1970 to provide investors with regular, comparable financial information. Any move away from that cadence would require public comment and could take significant time to finalize.
Mixed Reaction From Experts
Analyst Joseph Carlson dismissed Trump's argument, saying quarterly reports do not drive short-term thinking. "The idea that reporting numbers on a quarterly basis makes the company short-term focused is nonsense," he said, warning that eliminating them would make stocks "more opaque, less updated, and [face] worse pricing."
Others welcomed the idea.
Market strategist Tom Lee said, "A 90-day cycle is not how business operates. This is why so many companies are staying private."
Economist Trinh Nguyen also noted that the U.K. and EU already operate without quarterly mandates, calling it a reform with bipartisan backing.
Business Leaders Divided
The debate is not new. In 2018, Warren Buffett and JPMorgan CEO Jamie Dimon urged companies to stop issuing quarterly guidance, though Buffett said he still favored earnings reports themselves.
Trump also floated the idea during his first term.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
