Tag: Mario Draghi

Mario Draghi and Goldman Sachs, Again

By Simon Johnson

In its previous response to us, the the Bank of Italy pointed out that Mario Draghi (its current governor) did not join the management of Goldman Sachs until 2002 – hence he was not there when the controversial Greek “debt swaps” were arranged.

We agree that he joined Goldman only in January 2002 (this was in our original post).  But the latest revelations regarding the Goldman-Greece relationship (on the Senate floor, no less) clearly indicate that Goldman was a lead manager of Greek debt issues in spring 2002, i.e., when Mr. Draghi was on board.

This raises three entirely reasonable and straightforward questions. Continue reading “Mario Draghi and Goldman Sachs, Again”

Bank of Italy Defends Draghi

By James Kwak

The Corriere della Sera, probably Italy’s most respected newspaper, relays a statement by the Banca d’Italia (Italy’s central bank) that its head, Mario Draghi, had “no role” in the Greece-Goldman Sachs interest rate swaps that have been reported by Der Spiegel and The New York Times. Here are some translated excerpts from the story:

“The transaction with Greece ‘was executed prior to the arrival of Draghi at Goldman Sachs,’ added sources from the [Banca d’Italia*], recalling that the governor [Draghi], who has headed the Banca d’Italia since the beginning of 2006, was vice president and managing director of Goldman Sachs in London from 2002 to 2005.

“On Tuesday, the former chief economist of the IMF, Simon Johnson, in his blog but picked up by other media, drew attention to Draghi, also calling into question the transaction by Italy, while [Draghi] was serving as director general of the [Italian] Treasury. . . . But it was in light of these possible connections, to avoid misunderstandings and rumors on the past role of Draghi, that the Banca d’Italia also chose to specify, on the subject of the Italian transactions in the 1990s, that ‘they had the goal of reducing the cost of the public debt and not to hide the true state of the public’s accounts.'”

The article is referring to this post by Simon asking whether Draghi had any connection to the Goldman-Greece or similar transactions with other governments.

* The actual text says “Istituto di via Nazionale.” The Banca d’Italia is located on the via Nazionale in Rome. This is similar to referring to the U.K. prime minister’s office as “Downing Street.”

Fallout From Goldman-Greece Affair Widens: Impact On The European Central Bank

By Simon Johnson

As controller of the euro, the European Central Bank (ECB) wields great power in Europe and has a wide global reach.  The race to become the ECB’s next president – with a term that starts next year – has been intense and hard fought.  The final selection is down to two men: the ultra hawkish Axel Weber, head of the Bundesbank, who sees inflation dangers at every turn; and the relatively more moderate Mario Draghi, head of the Bank of Italy, chair of the Financial Stability Board, and experienced international economic diplomat. 

Unfortunately for those hoping that Draghi could still prevail, he is also formerly senior management at Goldman Sachs and serious questions are emerging regarding what he knew and did during Goldman’s alleged “let’s help Greece circumvent EU budget rules” phase in the early 2000s.

Specifically, Draghi joined Goldman Sachs in January 2002, after a distinguished public service career – including 10 years in a key position (Director General) at the Italian Treasury.  His formal titles were Managing Director, Vice Chairman of Goldman Sachs International, and member of the “Group’s Commitment Committee”; his job, according to Goldman’s press release, was to “help the firm develop and execute business with major European corporations and with governments and government agencies worldwide.”

Did this involve Greece? Continue reading “Fallout From Goldman-Greece Affair Widens: Impact On The European Central Bank”