Greek Prime Minister George Papandreou said his country would investigate what role American investment banks played in damaging his nation’s ability to raise money. His theory appears to be that the banks did something wrong. Asked whether there was a possibility of legal action against the banks, he said: “I wouldn’t rule out that this may be a recourse also,” according to Reuters.
But there is a high degree of likelihood that institutional investors did nothing wrong. Based on Greece’s own mismanagement of its budget and the size of its deficit, shorting the nation’s debt may simply have been a smart way to make money. In other words. Greece probably brought the market’s reaction on itself
Douglas A. McIntyre
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