[bd_at_rivenhill]

Frankly, we ended up with the cure AND the disease. Special purpose entities were used by Enron to muddy up its accounting so nobody could tell that it was doing stupid deals to hit its quarterly numbers and wasn't really making any money, and then they were used again during the real estate bubble on an even wider scale to mask the risks of the mortgage origination machine (with convenient help from the bone-headedness of the ratings agencies). So the "cure" really didn't seem to help the disease very much.

Instead of dumping a bunch of new reporting requirements on everybody, it should be pretty simple: increase the amount of equity capital that needs to be held against debt (i.e. force a decrease in leverage) and change the accounting rules so shit that could blow up the company by some mechanism has to show up on the balance sheet. However, the current system creates a lot more work for lawyers, accountants and bureaucrats so it seems unlikely to be simplified anytime soon.

[MichaelMoser123]

i think your proposed requirements would be on top of existing regulations, so they would also create a lot of additional work for lawyers and accountants.

it might be that what stands behind Enron and other bubbles is a decrease in the rates of profit : and so it goes that people put stuff into more and more risky schemes in order to maintain expected growth targets; in order to do so they have to hack/find ways around existing regulations, but we know that you can hack any system of rules ;-)

All that might also be true for internet businesses : we had a big growth in tech business over the previous decades, but now it might get increasingly difficult to achieve the same rates of return (or not).