Sarbanes-Oxley is a US federal law enacted in response to the rising incidence of corporate and accounting fraud at prominent corporations, as exemplified by Enron, whose annual revenues in 2001 decreased from over $100 billion to nearly zero in a matter of months. Enron's market capitalization prior to its collapse was over $60 billion, while its ten year annual growth rate exceeded 50%. Enron collapsed primarily because its business-model was inextricably linked to the amount of trust customers placed in its financial integrity. Once this confidence withered, Enron's clients became unwilling to trade long-term natural gas contracts due to a concern they may never be fulfilled. The underlying market dynamics are similar to those of a bank run, where panic-driven depositors race to withdraw their funds as quickly as possible. A mounting lack of trust quickly envelops into a self-fulfilling prophecy.
These same principles, in a sense, also
apply to the Catholic Church. Were the laity and non-believers alike
cease to believe in the fundamental moral integrity of the Church, a
global institution that is of enormous value and importance, would
quickly fail. Loss of trust precipitates failure, thus justifying the
initial loss of trust. The only effective antidote for preventing this
outcome is the restoration of trust. Unfortunately the US Catholic
Bishops have failed to meet the growing public demand for greater
transparency, but instead have enacted a series of measures designed
to prevent further instances of abuse in every arena except those
where it actually occurred.