MercoPress. South Atlantic News Agency

Athens looking into US investment banks role in current Greek debt crisis

Prime Minister George Papandreou: “I hear the words fraud and lack of transparency”

Greece is investigating US investment banks and their role in the run-up to the Greek debt crisis which has shaken faith in Euro zone economies, Prime Minister George Papandreou said in comments broadcast.

Wall Street and major banks around the world are attracting scrutiny from regulators who are looking at transactions that occurred in the run-up to the sub-prime mortgage meltdown and financial crisis.

US prosecutors are already conducting a broad criminal investigation of six major Wall Street banks to determine if they misled investors.

“We are right now having a parliamentary investigation in Greece which will look into the past and see how things went the wrong direction and what kinds of practices were negative practices,” Papandreou told CNN.

“There are similar investigations going on in other countries and in the United States ... I hear the words fraud and lack of transparency. So yes, there is great responsibility here,” he said. Asked whether there was a possibility of legal action against the banks, he said: “I wouldn't rule out that this may be recourse also.”

The European Union and International Monetary Fund agreed a 140-billion US dollars bailout of Greece after Greek bond spreads hit record highs which meant Athens could not service its debts.

Three bank workers, including a pregnant woman, were killed in Athens when rioters threw petrol bombs at a bank during a protest last week against government austerity measures demanded by the EU and the IMF.