Call for probe on banks’ role in Greek crisis

[Joanne98]

Carolyn Maloney, the New York Democrat who chairs the joint economic committee in Congress, called on Friday for the House financial services committee to examine US financial firms’ “involvement” in the Greek debt crisis. “I believe a hearing is timely and important for the committee to ensure proper oversight and to investigate whether or not additional actions may be appropriate,” Ms Maloney said in a letter to Barney Frank, the chairman of the committee

Mounting pressure in Congress on banks that helped Greece massage its public finances follows news that the Federal Reserve is also examining the matter. “We are looking into a number of questions relating to Goldman Sachs and other companies and their derivatives arrangements with Greece,” Ben Bernanke, the Fed chairman, told Senate lawmakers on Thursday.

Mr Bernanke also said that the use of credit default swaps – other derivatives that protect nations against default and whose volatility has contributed to market instability in connection with the Greek debt crisis – could in some cases be “counterproductive”. Goldman has not commented on the Fed probe. The Securities and Exchange Commission has also confirmed it is looking into “potential abuses” related to the use of credit default swaps.

Ms Maloney compared the use of credit default swaps in the Greek situation to the “activities that brought down American International Group”, referring to the US insurer that collapsed and was bailed out in September 2008. “These reports, if true, are a shocking echo of the financial crisis that faced the US in 2008 – whose reverberations are still being felt today, in the worst recession in decades.”

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http://www.ft.com/cms/s/0/9d1be3ce-2313-11df-a25f-00144feab49a.html

[RUMMYisFROSTED]

1. 16 months and counting...

[upi402]

2. CDS's -could in some cases be “counterproductive” - Bernanke

Am I missing something? Seems a bit easy-going. And to what end?

Me, I'm tired of taking it in the end.