The subprime crisis has some eerie parallels with Enron and WorldCom, say the two Sarbox co-authors.

In an interview with the Indian media, they say what's needed is more regulation. Sarbanes-Oxley-style.

"One of the tenets of our Act was transparency. Clearly, one of the problems with the subprime mortgage crisis is the lack of transparency in the secondary market. These are somewhat parallel problems to the lack of transparency going back to Enron and WorldCom. There is consensus on some of the areas and others are pretty controversial,'' says Michael Oxley.

"A lot of those mortgages (were) originated by agents that are not within a regulated environment and that is clearly part of the problem," says Paul Sarbanes. "It does show the need to be more vigilant about the practices that work in our market because the markets can be very sensitive and very fragile as we are witnessing right now. And the extended repercussions can go well beyond the particular problem. It just feeds on itself and some of that is happening right now."

They are missing the point. The worst thing you could do now would be to rush in with another knee-jerk overreaction to a crisis that creates a new set of problems. And any legislation would have trouble dealing with the fact that the root causes of all this credit turmoil are complex. One trigger for the turmoil was the fact that debt instruments had become overpriced in recent years (and funding costs, as a corollary, excessively low). And another key issue was the recent, frenetic bout of financial innovation that had enabled banks and investors to slice and dice risk, quite legally, but doing it to the point where no-one knew where all the time-bombs were located.