Greek PM warns investigation could target U.S. banks

The Greek Prime Minister, George Papandreou, today said in a televised Greek broadcast his government is considering launching investigations on major U.S. financial intermediaries to determine their role in the nation’s debt crisis that has fueled deadly protests in the Greek capital of Athens.

Mr. Papandreou also warned he would not rule out possible legal action as an option for recourse for the banks if necessary.

On May 6, the Greek government passed new austerity legislation to lower consumption spending and to increase revenue with higher taxes, in a bid to receive the now confirmed USD $140-billion emergency loan.

 The greater Greek people argue the new measures are only going to increase costs for ordinary people while the wealthier would be better off, prompting massive protests across the country.

The Prime Minister said a parliamentary investigation is already underway, and that the investigation could target major Wall Street banks that could have contributed to the nation’s debt with highly risky CDOs (collatorized debt obligations) that included sub-prime mortgages, among other exotic derivatives.

Many argue the lack of transparency in the government, widespread tax evasion, and mismanagement has contributed to the country’s debt problems.

Arguably, it appears many times buyers of risky securities do not fully understand what they truly are buying, especially with relation to highly complex derivatives.

The free and efficient market theories argue the massive losses would be justified since investors should make rational investment decisions, and presumably have enough knowledge to understand the risks. The fact that the investment banks could have intentionally masked the true riskiness questions who should bare recourse, the banks, or the investors who bought the securities to begin with. After all, the market is truly a zero-sum game.

tag TAGS: ,
Short URL:
b2p Ensure that you follow us on Twitter and Like us on Facebook
Peggy holds a Bachelor Arts degree with honors in Economics from York University in Toronto, Canada. She is a Certified Management Accountant (CMA). She has also passed Level I of the Chartered Financial Analyst (CFA) Program. She is also a realtor. Write to [email protected]
We are perfectly committed to the highest ethical and professional codes of conduct and standards in the industry on a firm wide basis. Learn more about us, our contributors, and our governance
We encourage you to comment. Comments are moderated. Comments that are abusive, off-topic, have marginal substance, or include promotional content will be removed. We cannot facilitate requests to edit or remove comments, or explain moderation decisions

Business 2.0 Press publishes exclusive business tech news and analysis covering start-ups to large-caps from Bay & Wall streets since 2008 from a group of highly knowledgeable industry professionals that abide by the toughest industry codes of conduct and professional standards lightMore

lightAdd value by subscribing (RSS)

logo has the most stock ratios for public companies. Get the most comprehensive micro insight on public firms available on the web, all for free.
Stock Fractionsgo


Colon cancer is one of the leading causes of death. Irrespective of family history, everyone is exposed to the risk. About 90% of colon cancer cases begin from non-cancerous tumors, polyps, which could form in the large bowel. Screening with a colonoscopy will painlessly remove any polyps hence almost entirely reducing your risk of developing the horrible disease. The good news is that about 90% of colon cancer cases are preventable through a simple (yes, simple) colonoscopy.
Learn moreatom
Public service message from Business 2.0 Press