Tuesday, February 9, 2010

Sovereign Debt Off-Balance Sheet Financing

Came across a Felix Salmon post at Reuters detailing just one financing deal between Greece and GS.  Basically, Greece is further in debt then their balance sheet indicates.  Apparently this is old hat for countries (examples are given in the post).  And this is just one deal.  In one country.  Who knows how much is really out there.
http://blogs.reuters.com/felix-salmon/2010/02/09/how-greece-hid-its-borrowing-in-the-swaps-market/

And this is how contagion works....
http://online.wsj.com/article/BT-CO-20100209-718854.html

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