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Lew noted that there have been 250 denial of service attacks against financial companies in the last 3 years.
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U.S. Treasury Secretary Jack Lew’s keynote speech at the Delivering Alpha Conference addressed the issues of cyber security, tax inversions, business tax reform and lessons that can be learned from last year’s debt ceiling crisis.
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Secretary Lew noted that there have been 250 denial of service attacks against financial companies in the last 3 years, and he is concerned about the high risk of a potentially “catastrophic” cyber attack. Financial institutions need to find ways to protect themselves and their clients, and Secretary Lew said improving security should be a major priority of management at all levels. The problems of actual attacks are exacerbated by the tendency of companies to attempt to conceal security breaches out of an anxiety that the reputation of their operations may be compromised. Secretary Lew said that secrecy over these attacks should not be tolerated and called on the government to pass tighter cyber security laws.
CNBC’s Jim Cramer interviewed Secretary Lew about the increasingly popular strategy of tax inversion, when companies locate abroad to avoid onerous U.S. business taxes. While Secretary Lew said that administrative action could not force companies to stay domestic, he called on business owners to show “economic patriotism, ” and recommended reforms to business tax laws to make it more attractive for companies to keep their headquarters in the United States. Concerning the collective trauma of the debt ceiling, Secretary Lew said, “I hope we never go back to what we saw last October, ” when there was a political showdown and the government was in danger of default. He expressed hope that all sides “learned their lessons.”
He made a potentially controversial statement that the carried interest provision, which allows hedge fund fees to be taxed similarly to capital gains, is not applied appropriately.
Finally, Secretary Lew’s Q&A session with Jim Cramer ended with appreciative laughter from the crowd when he refused to answer Cramers’ question of whether he felt stocks in certain sectors were overvalued. The amused response was probably in reference to Jim Cramer’s harsh words on a recent Mad Money program for Fed Chief Janet Yellen’s statement that biotech and social media stocks were overvalued and approaching a bubble. On Wednesday’s program, following the interview at the conference, Cramer praised Secretary Lew for not opining on specific sectors of the stock market.
