Monday, May 17, 2010

Greece may target US banks in legal action.. Goldman Sachs $GS

Greece's prime minister said he may take legal action against US banks for their role in the country's debt crisis. Wall Street is attracting scrutiny from regulators around the world, who are examining transactions that occurred leading up to the subprime mortgage mess and the global financial crisis.

For its part, the Greek parliament is looking into deals national authorities did in 2000 with help from Goldman Sachs that allowed them to mask the size of the country's debt through complex financial instruments. "I hear the words fraud and lack of transparency, so yes, there is great responsibility," Greek Prime Minister George Papandreou said in an interview broadcast yesterday on CNN. Read more:

Complaining that international banks have inflamed Greece's debt crisis with commentary about a likely default, Papandreou added that he "wouldn't rule out" taking banks to court. Last week's $1 trillion rescue package for eurozone countries was bigger than many economists and investors expected, as central bank officials sought to protect the euro, whose value has tumbled in recent days. But the bailout package "didn't do more than buy time" as European nations struggle to work through economic and budgetary differences, said German Chancellor Angela Merkel. "If you just ignore this problem, you won't get things to calm down."

In early morning trading in Asia, the euro fell to nearly $1.23 -- its lowest level since the collapse of Lehman Brothers. Meanwhile, spreads on Greek bonds have continued to widen as investors increasingly doubt the country's ability to meet its obligations. While recent austerity measures have provoked riots in Athens, Papandreou insisted Greece will carry them through. "We have made our mistakes, we are living up to this responsibility," he said. "But at the same time, give us a chance. We'll show you."

No comments:

Post a Comment