View more on these topics

Goldman Sachs admits currency swaps role in Greek crisis

Goldman Sachs USA chairman Gerald Corrigan told MPs that its currency swap deals entered into with Greece could have added to the country’s debt crisis – and said it was possible that the UK was involved in similar deals with other banks.

Speaking to the Treasury select committee yesterday, Corrigan said that the currency swap deal was not solely limited to Goldman Sachs and Greece but did contribute to the country’s current debt crisis which, it is claimed, allowed them to mask additional borrowing.

He said: “It is true that a family of currency swaps that were entered into jointly by Goldman Sachs and Greece in the late 90s and the early part of the 2000s, were of a nature that they did produce a small, but not insignificant, reduction in Greece’s deficit and debt at that time.”

He added, however, that these were in line with the standards expected at the time. He said: “However, it is very clear today, based on the investigation that I have done over the past few days, those transactions were very much consistent with the standards of behaviour of measurements used by the European community.” When pressed by MPs, he said “with the benefit of hindsight… the standards of transparency could have been and probably should have been higher”.

When asked if it was possible that the UK had entered into similar deals, he replied “it is possible”, but that he did not know specifically if other had similar deals in place.

The swap deal that Goldman Sachs and Greece made in 2001 is now prohibited, with the EU modifying standards in 2007.

Corrigan suggested that the standards might have been too liberal at the time. He said: “Those standards were modified in 2007, which suggests that they were more liberal than they could have been back in 2001.”



Behind the scenes: the CII on setting exams

The CII has less influence than you might imagine on the exam process. Most of the significant decisions are taken by industry practitioners. The learning outcomes and content are put together with significant input from practitioners and employers. The exam also has to meet the correct level of learning as determined by Ofqual. The interpretation […]

German house poised for UK launches

DWS, the asset management arm of the Deutsche Bank group, is to launch an absolute return bond fund and a specialist global equity fund into the UK retail fund market.


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. Unregulated activities? How many other countries face similar if not more significant problems? UK in particular.

  2. Funny how Goldman Sachs can show exorbitant profits and yet get a 10 billion dollar bail out from the US goverment and ask for more.

    This article didn’t mention that Goldman Sachs charged 300 million dollars for this loan/ transaction that was passed on to the average Greek citizen as debt.

    This article also didn’t mention the Greek Prime Minister Constantine Simitis’ who was head of state at the time.

    Goldman Sachs, engaged in a controversial “currency swap” with the Greek government in 2002 during Greek Prime Minister Constantine Simitis’ term as head of state.

    Simitis, whose real name is Aaron Avouris, a Jew, was the key player along with Lucas Papademos, who was Governor of the Bank of Greece at the time and former senior economist of the Federal Reserve Bank of Boston, in brokering the deal with Goldman Sachs.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm