Goldman Sachs' role in Greek financial crisis investigated

“We are looking into a number of questions relating to Goldman Sachs and other companies and their derivatives arrangements with Greece,” Mr Bernanke said, apparently referring to Greek currency transactions structured by Goldman.

Goldman has come under fire from European regulators for structuring transactions that helped Greece trim its debt figures after it joined the European monetary union in 2001, the Financial Times reports.

When Greece’s public debt exceeded its annual gross domestic product, the bank helped it arrange a currency trade to delay its repayments while meeting European deficit limits.

Goldman insisted that the currency swaps played a minimal role in Greece’s current financial crisis and that the transactions were up to European regulations.

Goldman Sachs helped Greek officials raise $1 billion of off-balance-sheet funding in 2002 through swaps, which European Union regulators said they knew nothing about until recent days, an article in BusinessWeek says.

Federal Reserve officials are now collecting information on documentation, and terms and conditions. They are consulting in subject-matter experts and cooperating with counterparts in other countries. The Fed is also looking at the issue with its new financial system risk unit, which draws on economists, lawyers and bank examiners.

The Fed may request officials from Goldman Sachs and other firms to show how the deals conducted with Greece met with established risk-management standards and accounting rules. The SEC is examining disclosure issues related to the swap, according to an official familiar with the inquiry.