From the Wall Street Journal: Greek police say a bomb exploded Tuesday evening outside an office of JPMorgan Chase in Athens, the Associated Press reports. No one was hurt, according to the report.
“It was a time-bomb at JP Morgan’s offices in central Athens,” a police official told Reuters. “The explosion damaged the outside door and smashed some windows.”
A local newspaper reportedly received a warning call prior to the explosion, according to Reuters. Police had cordoned off the area after the newspaper received the warning call.
Police cars, ambulances and fire engines have blocked streets in the upmarket central district of Kolonaki, where JP Morgan’s Greek offices are situated, a Reuters witness said.
News accounts in recent weeks have detailed how Wall Street firms helped Greece doctor its balance sheets to lie to the European Union that it was in compliance with rules governing debts to GDP ratios:
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.
It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.
Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.
As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.
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Written by Jean Valjean
