indo-asian news service, Athens, July 11: If Greece follows the advice of a former Goldman Sachs banker, the global investment banking firm could face legal action for helping hide the European country’s debts through complex transactions, a media report said Saturday.
Jaber George Jabbour, who formerly helped design the transactions known as “swaps”, has offered help to the Greek government in a formal letter saying that it could “right historical wrongs as part of (its) plan to reduce Greece’s debt”, British daily The Independent reported.
The Syrian-born banker, who advises indebted governments battling investment banks over expensive complex derivative trades that turned sour, has told the Greek government in a formal letter that it has a chance of clawing back some of the money it paid Goldman to secure its position in the eurozone.
Jabbour has in the past assisted Portugal in restructuring some complex trades, which later helped uncover a scandal that cost many senior political officials their jobs.
According to the daily, Goldman Sachs banker Antigone Loudiadis stitched the swaps together, which made about 2 per cent of Greece’s debt disappear from its national accounts.
Goldman swapped debt issued by Greece in dollars and yen for euros which were priced at a historical exchange rate that made the debt look smaller than it actually was, the report added.
The country’s membership of the euro in 2001 gave it access to billions of easy credit, which it was then incapable of paying back, leading to its current crisis.
Greece Saturday was edging towards a last-minute deal with its creditors which will keep it from crashing out of the single currency zone.
The deal is based on fresh economic reform proposals submitted by Athens on Friday.
International financial turmoil impacts foreign reserves
Mumbai: India’s foreign exchange reserves tripped on Greece’s debt crisis and Chinese stock markets crash and plunged by over $700 million for the week ended July 3. Analysts attributed the fall in reserves to an appreciating dollar vis-a-vis other international currencies and declining gold value. Data furnished by the Reserve Bank of India (RBI) in its weekly statistical supplement, showed that India’s foreign exchange reserves plunged by $704 million and stood at $354.51 billion. For the week ended June 26, the reserves had fallen by $237.5 million and stood at $355.22 billion. The reserves had grown by $1.17 billion and stood at $355.45 billion during the week ended June 19. “The reserves were negatively impacted by the depreciation of major currencies like Euro and Pound against the dollar due to the Greece crisis,” Anindya Banerjee, senior manager for currency derivatives with Kotak Securities, told IANS. Nearly 20-25 per cent of the Indian reserves are made up of non-dollar currencies. The individual movements of these currencies against the dollar impacts the overall reserve value.”The Reserve Bank continued to buy dollars as it is pretty active in the forward purchase markets since the last 20-23 months. The currency corrections due to the Greece crisis affected the reserve position vis-a-vis dollar purchases,” Banerjee said.
