From the editor
Can we avoid Greece's fate?
It's the subprime scandal all over again. Not content with having demolished the global economy once by turning worthless mortgages into AAA-rated debt, it turns out that investment banks – in this case Goldman Sachs – helped Greece during the past decade or so to create the illusion that it was a fiscally responsible nation.
I imagine that this is the sort of thing Lord Adair Turner meant when he made his much-derided comment about some financial activity being "socially useless". And he'd be right. In fact, it's downright socially harmful. Banks have effectively been paid good money to provide financial gimmicks that allow governments to cook their books legally.
As the EU's statistics agency Eurostat said as far back as 2008, "in a number of instances, the observed securitisation operations seem to have been purportedly designed to achieve a given accounting result, irrespective of the economic merit of the operation".
So what's the solution? As you might expect, the punditry at large is calling for more regulation. But what form such regulation might take is less clear.
• Read the full editor's letter here: Can we avoid Greece's fate?
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