How Parmalat Went Sour

Here's the skinny on Europe's enormous financial scandal In the wake of the financial scandals at Enron, WorldCom (MCWEQ ), and Tyco International (TYC ), European chief executives smugly insisted no such fraud could ever occur in Europe. They spoke too soon. The accounting calamity at Italian dairy-foods giant Parmalat has prosecutors scrambling to find out what happened to $8.5 billion to $12 billion in vanished assets. That sum makes Parmalat one of the largest financial frauds in history. …

…on Britain's Financial Services Authority, pooling powers now held by stock market regulator CONSOB and the Bank of Italy. The ultimate effectiveness of such an institution, however, will depend upon its insulation from the kind of chronic political meddling that undercuts many of Italy's regulatory bodies -- the very interference that has resulted in a series of financial scandals in Italy going back many years. By Gail Edmondson in Frankfurt with Laura Cohn in London