Sarbanes-Oxley Act passed in US in 2002, following Enron’s collapse and many other scandals. This act imposes greater transparency for publicly-traded companies. In order to be compliant with the law, firms must keep detailed records of all financial transactions. They also have to reveal any conflicts of interest that may exist between executive and shareholder. As a result, banks implemented internal controls that aim to reduce the risk of fraud and money misappropriation.
Both regulations played an important role in promoting accountability within the banking industry, and encouraging companies to take appropriate steps for future loss prevention.