Bank of Greece to investigate bond deals

Greece’s central bank will look into all bond sales by Greek lenders that ended up with pension funds over a seven-year period as it investigates the possible sale of Greek government structured bonds at inflated prices. «The public prosecutor has asked us to gather information from banks for the period 1999-2005,» Bank of Greece Governor Nicholas Garganas told reporters on the sidelines of a conference yesterday. He did not elaborate on the number of transactions that would be checked for any irregularities. The labor minister in charge of pension funds and the head of the civil servants’ fund have been sacked in a months-long scandal that has embarrassed the government. Greek prosecutors are investigating accusations in the press and even by government ministers that a Greek government structured bond was purchased by the country’s civil servants’ auxiliary pension fund at too high a price. The -280 million, 12-year bond with an initial coupon of 6.25 percent was underwritten by JP Morgan in February, bought by brokerage North Asset Management and changed several hands before ending up with state pension funds. The investigation so far has not resulted in any charges. JP Morgan and North have offered to buy back the bond but have denied any wrongdoing. The Acropolis brokerage which sold the bond to the civil servants’ pension fund was shut down by the securities commission and is under liquidation. Pension funds have since been banned from investing in structured bonds. (Reuters)

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.