Mr Donaldson called for a new environment of integrity

Speaking after being sworn in as chairman of the Securities and Exchange Commission (SEC), he stressed the importance of restoring confidence in how corporate America was run.

"We will hold accountable all those who violated the public trust," Mr Donaldson said.

"We will demand responsible corporate governance throughout the business and financial world.

"We will strengthen our market structure, making the markets more efficient, more transparent and friendlier to all investors."

A time for leadership

Investors' confidence in US companies has been rocked by a series of high profile scandals, such as Enron and WorldCom.

Mr Donaldson said it was up to business leaders to show the public a different face.

"It is time that all those who manage and govern our corporate and financial institutions show true leadership," he said.

"As chairman of the SEC I will call on them individually and collectively to create a new environment of integrity and accountability that goes well beyond adherence to laws."

Experience

Mr Donaldson was a co-founder of investment-banking firm Donaldson Lufkin & Jenrette.

He also served as chairman of the New York Stock Exchange from 1991 to 1995 and was chairman of the insurance giant Aetna.

Mr Donaldson succeeds Harvey Pitt, who resigned in November last year following a volatile 15-month reign as head of the SEC.