Article Image
IPFS News Link • World News

Goldman behind Greek crisis?

• NYTimes
Wall St. Helped to Mask Debt Fueling Europe’s Crisis
Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.
Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.
The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

1 Comments in Response to

Comment by Ross Wolf
Entered on:

According to this article, it appears Wall Street participated in making billions in “unrecorded loans” to Greece that were foreseeable to mislead investors, regulators and banks about Greece’s future liabilities, foreseeable to undermine Greece’s ability to repay, e.g., accumulating costs of Greece’s health insurance system. While there may be no Rules that control how Greece borrows money, could injured banks and investors holding those loans, utilize Criminal and or Civil Racketeering (RICO) laws to sue or prosecute Wall Street firms that facilitated making the loans to Greece?