Greek-style creative accounting is endemic among sovereigns
March, 2nd, 2010
Governments around the world have been massaging their own balance sheets and disguising their true liabilities for years.
In this interview with the Huffington Post, Martin Wolf, the Financial Times’s chief economics commentator sheds light on the scale of the problem — and its repercussions. He also lets US investment bank Goldman Sachs off the hook — pointing out that while the contentious 2001 swaps trades it handled for Greece were “completely scandalous”, they were perfectly legal. Wolf points out that Greece and many other sovereign states around the world have been willing users of Enron-esque creative accounting and deceptive derivatives dealing for years.
Seperately, Citigroup insiders are saying that to blame derivatives and investment bankers for governments’ financial travails is a bit like “blaming the mirror for your ugly face”.
Wolf told Aaron Task:
“Enron accounting has unfortunately become a salient characteristic of sovereign balance sheets long before Enron started. The accounts of our governments are a scandal.
“They’re completely scandalous and the US no exception. It’s just one of many governments whose accounts tell us nothing about the true state of its finances and the long-term obligations associated with that. We would never allow that with any private business.”
- To view the Martin Wolf being interviewed by Aaron Task, click here
- For an excellent analysis of the merits of naked shorting by the FT’s Sam Jones from FT Alphaville, click here
Short URL: https://www.ianfraser.org/?p=1035
Posted by Ian Fraser
on Mar 2 2010. Filed under Blog.
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