Sarbanes-Oxley passed
After Enron and WorldCom collapsed into accounting fraud, Congress passed the most significant corporate-governance legislation since 1934. CEOs and CFOs had to personally certify financial statements. Internal-controls requirements became extensive. Auditors were restricted from also providing consulting services to the same companies.
Sarbanes-Oxley was the rare exception to the timeline's pattern: it was passed quickly — nine months after Enron's bankruptcy. But it addressed only the narrow problem (accounting fraud) and left the broader structural issues (bank consolidation, OTC derivatives, rating-agency conflicts) entirely untouched. Those produced the 2008 crisis six years later.
05 · The Deregulation Era
The late 1990s and early 2000s saw the most dramatic loosening of financial regulation since the 1920s. Glass-Steagall was repealed. OTC derivatives were explicitly exempted from CFTC oversight. When Enron and WorldCom showed what the new environment produced, Congress responded with Sarbanes-Oxley — but only on corporate accounting, not on the structural changes that had already happened inside the banks themselves.
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