Goldman helped Greece cook books

Published on 15 February 2010 at 14:37
The Independent , 15 February 2010

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Leading with the headline, “Goldman Sachs: the Greek connection,” The Independent reports that the investment bank has come under scrutiny as the most important of a group of institutions, which helped the Greek government to disguise the scale of its budget deficits and debt levels. Specifically, the daily refers to a 2002 deal in which “Goldman channelled $1bn of money to the Greek government in a transaction called a cross-currency swap:” and notes that “such deals are an expensive way of raising money, but they have the advantage of not having to be accounted for as debt.” According to The Independent, Greece is not the only state to have resorted to creative accounting using financial derivatives: questions have also been raised about a “controversial transaction” between Italy and JP Morgan, before Italy joined the euro. As European Finance ministers meet in Brussels to discuss ways to protect the eurozone from a looming debt crisis, there is growing concern over “the size and scale of derivatives deals that are not fully understood, even by Eurostat, the European Union's official statistics body, which has complained that member nations' finances are opaque and the information it is given about derivatives deals is incomplete.”

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