McAfee, R. Preston (2004) The Real Lesson of Enron's Implosion: Market Makers Are In the Trust Business. Economists' Voice, 1 (2). ISSN 1553-3832. doi:10.2202/1553-3832.1008. https://resolver.caltech.edu/CaltechAUTHORS:20180802-145422339
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Abstract
How did Enron, a firm worth $60 billion, collapse over the discovery of a billion or so in hidden debt and fraudulent accounting? It didn't. Or, at least, not directly. Market makers like Enron and Ebay are in the "trust" business, just as banks and insurance companies are. Once trust was lost, the rest of Enron's value quickly disappeared. The maintenance of customer trust is an important, and frequently mismanaged, aspect of business strategy. The legislative response of Sarbanes-Oxley may do some good, but cannot really ensure trust.
| Item Type: | Article | ||||||
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| Subject Keywords: | Enron; signaling; trust; bank run; expectations; eBay | ||||||
| Issue or Number: | 2 | ||||||
| DOI: | 10.2202/1553-3832.1008 | ||||||
| Record Number: | CaltechAUTHORS:20180802-145422339 | ||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20180802-145422339 | ||||||
| Official Citation: | McAfee, R. (2004). The Real Lesson of Enron's Implosion: Market Makers Are In the Trust Business. The Economists' Voice, 1(2), pp. -. Retrieved 2 Aug. 2018, from doi:10.2202/1553-3832.1008 | ||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | ||||||
| ID Code: | 88536 | ||||||
| Collection: | CaltechAUTHORS | ||||||
| Deposited By: | Tony Diaz | ||||||
| Deposited On: | 02 Aug 2018 22:00 | ||||||
| Last Modified: | 16 Nov 2021 00:27 |
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