Enron, Andersen & Virtual Capitalism

The case of Enron, the largest bankruptcy in economic history, allows important insights into the modus operandi of contemporary finance capitalism. Enron's collapse was the result of a financial overstretch which followed the pattern of the long known pyramid game ("Ponzi finance"). Enron pioneered ways, like institutional innovation and "creative" accounting to hide liabilities and to boost assets beyond realistically assessed value added and profitability. Later events have proved that these techniques have been facilitated by financial deregulation. They were widely applies by public companies. An adequate depreciation of their assets increases the risk further bankruptcies.