Corrigan: Goldman Sachs consulted Eurostat on Greece currency swaps

- Matt Cameron
- 22 Feb 2010

Goldman Sachs did consult European statistics agency Eurostat on currency swaps traded with the Greek government, which allowed the sovereign to reduce the size of its reported debt, Gerald Corrigan, a managing director and chairman of Goldman Sachs Bank USA, told a House of Commons Treasury Select Committee hearing this afternoon. It is the first public comment to come out of a Goldman official since the currency swaps controversy reignited two weeks ago, and directly contradicts Eurostat's claim the agency had no knowledge of the trade.

"Personnel from Goldman did consult Eurostat on these swaps and there was no indication they were not in line with standards at the time," said Corrigan, speaking at the Committee's inquiry on systemically important institutions.

The Greek debt crisis has refocused attention on the swaps, which were first reported by Risk in 2003. The trades, completed with Goldman Sachs in 2002, effectively allowed Greece to borrow roughly €1 billion without adding to its public debt figures.

Eurostat, however, has denied knowledge of the trades, saying it was alerted only when the story hit the headlines two weeks ago. "Greek authorities have not informed Eurostat about this kind of swap operation. It is only recently that Eurostat has heard from the press about this individual operation. Eurostat has requested information from the Greek authorities and will only give further comment on the issue when it has received the information," said a Eurostat spokesperson.

Corrigan maintained the swaps were in line with Eurostat's rules at the time. "It is true that the swaps that were entered into by Goldman Sachs and Greece did produce a small reduction in Greece's debt to GDP ratios at the time. However, it is clear these transactions were consistent and comparable with standards used in the European community, and conformed with rules and procedures," Corrigan testified.

Personnel from Goldman did consult Eurostat on these swaps and there was no indication that they were not in line with standards at the time

But Corrigan, who said Goldman was by no means the only bank involved in these activities, also accepted transparency around the transactions should have been better.