Former Treasury Secretary Lawrence Summers has criticized the idea of eliminating quarterly earnings reports, a policy proposal floated by President Donald Trump in a Truth Social post last week.
US Markets Built On ‘Accountability And Transparency’
On Wednesday, in a post on X, Summers called the plan to scrap quarterly earnings releases “a bad idea whose time should never come.”
He said that America's capital markets have thrived precisely because of their “accountability and transparency,” adding that “frequent accountability and substantial sharing of information have been central to that.”
Summers, who served as Treasury Secretary under President Bill Clinton and later directed the National Economic Council under President Barack Obama, highlighted similarities between this aversion to quarterly earnings among executives and students in a classroom setting.
“Whenever I hear a CEO saying they don't want to deal with quarterly earnings,” he said, “I think of my students who don't want to have to deal with grades.”
Market Experts Split Over Proposal
Trump first proposed this idea in 2018 during his first term in office, prompting the Securities and Exchange Commission to open a comment period at the time, without resulting in anything substantial.
Around the same time, leading executives such as Warren Buffett and JPMorgan Chase CEO Jamie Dimon made the case for ending quarterly guidance measures, though not the earnings report itself.
Bill Harts, the CEO of Long-Term Stock Exchange, has since come out in support of the move, saying that a move to biannual reporting “can be better not only for companies but for investors as well,” since it allows sufficient time for more complete data to come through.
However, BlackRock Inc. (NYSE:BLK), one of the world’s largest asset managers, is wary, saying that “the potential loss in transparency and timely availability of information to investors would outweigh the potential benefits,” in a comment to the SEC.
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