Corporate Aftershock: The Public Policy Lessons from the Collapse of Enron and Other Major Corporations

Corporate Aftershock: The Public Policy Lessons from the Collapse of Enron and Other Major Corporations

Corporate Aftershock: The Public Policy Lessons from the Collapse of Enron and Other Major Corporations

Corporate Aftershock: The Public Policy Lessons from the Collapse of Enron and Other Major Corporations

Synopsis

The first book to address public policy in the light of recent corporate debacles

Corporate Aftershock is a reasoned, informed response to the numerous proposals to restrict derivatives, structured financing activities, and shareholder protection principles and practices following the failure of Enron and other corporations. Readers get a cogent analysis of the public policy world after recent corporate debacles. Corporate Aftershock provides a detailed background of the markets, players, regulations, and institutional environment surrounding these failures.

Christopher L. Culp , PhD (Chicago, IL), is a Principal at CP Risk Management LLC. William A. Niskanen, PhD (Washington, DC), is Chairman of the Cato Institute.

Excerpt

This is the first of two books sponsored by the Cato Institute that address the policy lessons from the collapse of Enron. This book, organized by Christopher L. Culp and edited by the two of us, focuses primarily on the policy lessons specific to the energy and other markets in which Enron traded and on the specialized financial instruments that it used. The contributors to this book are among the leading practical specialists in these markets and with these financial instruments, and we are grateful for the contribution of their valuable time to inform the broader community about these issues. The target audience for this book includes the academics who specialize in these issues, the others who trade in these markets, the many others who use these financial instruments, the regulators of these markets and financial instruments, and the policy officials who approve the rules by which these markets operate. Some of the policy lessons from these careful analyses of the collapse of Enron are also important to a broader audience—such lessons as the problems of conventional accounting and the limitations of the developing consensus model of corporate governance.

The second book, which I organized and edited, addresses the major policy lessons affecting the broader corporate sector from the collapse of Enron and several other large corporations. That book focuses primarily on the government policies that contributed to the collapse of these several large corporations, the reasons why their weak financial conditions were not revealed and possibly corrected earlier, and the major policy changes that would reduce the frequency and magnitude of future corporate failures. The major sections of that book, thus, focus on the policy lessons affecting accounting, auditing, taxes, and corporate governance that were highlighted by the collapse of these large firms. Most of the contributors to that book are academics who, in turn, have drawn on the extensive academic literature on these several subjects. The target audience for that book is the larger community of academics, the media, and policy officials who have been motivated to address the implications of the . . .

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