COLUMN-Clarity important for Europe stress tests: Leo Apotheker

(Leo Apotheker, co-CEO and member of the executive board of German software maker SAP AG (SAPG.DE), is a guest columnist. The views expressed are his own.)

By Leo Apotheker

PARIS, May 14 - The U.S. government's recent bank stress tests were all about clarity. With hard data and clear facts, they shone a bright light on the shadowy uncertainties of complex financial transactions.

The question now is: Will this sort of clarity be a part of doing business in the financial industry?

Bank regulators in the European Union should look at the U.S. example and make results of their upcoming stress tests of European banks transparent to the public.

Currently, they intend to inform only the EU finance ministers and executive agencies.

U.S. Treasury Secretary Timothy Geithner hit it on the head when he said last week, "There is a reassurance in clarity."

I think many would agree that reassurance is vital to the return of confidence in the financial system. The stress tests provided much more disclosure than is commonly shared by financial firms.

It demonstrated that we need more information, more clarity, and more disclosure if we are going to know where we stand in this complex global economy.

I submit that this "reassurance in clarity" is exactly what we need to properly manage the enormous influx of money -- larger than the Marshall Plan and New Deal combined -- that is now being put into the system by way of stimulus packages, recovery programs and unconventional emergency measures.

This is taxpayer money. It involves the public trust. Talk of accountability and transparency must be backed by hard data and clear facts. There must be a clear window into how the money is spent and how it is strengthening the economy.

Businesses and governments must have the information tools in place to make that happen.

I believe that this kind of clarity is necessary not only for banks but for all businesses involved, in any way, with that huge river of government money. We are already seeing why this kind of greater clarity is essential.

Armies of lobbyists are doing whatever it takes to channel the money to their patrons. Government agencies are struggling to define their funding allocations and to identify exactly how the stimulus money will impact the economy. The U.S. inspector general overseeing the government's bailout program says that he has already initiated "almost 20 criminal investigations into allegations of fraud."

And there is uncertainty and consternation among the recipients of the stimulus money. They're asking some tough questions about how they can manage the reporting workload, minimize risks, ensure compliance and demonstrate clear value to the public as well as shareholders.

The stimulus program cries out for greater clarity, and the time for government and business to get their act together is now. The first accountability deadlines for U.S. federal agencies to submit financial data are later this month.