Uh oh.

Times Online: Bank warns of Enron-style collapses
By Gary Duncan and James Moore
THE Bank of England yesterday gave warning that more large companies may be vulnerable to an Enron-style collapse triggered by loan conditions linked to their credit ratings.

As WorldCom, the US telecoms giant, struggled to fend off bankruptcy in the latest accounting fraud scandal to afflict corporate America, the Bank highlighted the dangers posed by a so-called “credit cliff” facing some companies.

The Bank said that tightly drawn contracts directly linking company payments and liabilities for borrowing to credit ratings — so-called “hard-wiring” — posed the risk of provoking collapses in susceptible firms’ viability.