Goldman Sachs' Greek tragedy

The thriving Wall Street bank had a hand in the Greek financial crisis that's threatening the world economy — is anyone surprised?

Goldman Sachs CEO Lloyd Blankfein
(Image credit: Corbis)

By using creative accounting to hide its ballooning debt, Greece has dragged the entire European Union to the brink of financial meltdown -- with, it turns out, plenty of help from Goldman Sachs. The widely-reviled investment bank gave Greece the equivalent of an off-the-books second mortgage so the country could live above its means while keeping to the EU's strict debt limits. As recently as last November, Goldman president Gary Cohn was trying to sell the nation on even more budgetary shenanigans. Has the severely PR-challenged Goldman now aided one global crisis too many? (Watch a report about Goldman Sachs's role in the global financial crisis)

Let's hope Goldman finally gets what's coming: We now know that "a single rogue bank can bring down the world's financial system," says Simon Johnson in The Baseline Scenario. If this had occurred in the U.S., well-connected Goldman would walk away unscathed. But the European Union has every incentive not to look the other way, and Goldman knows it.

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