ECB Pushes The M.A.D. Button, Asks Court To Bar Greek Swap Disclosure, Threatens With Market Disruptions

Tyler Durden's picture

Yesterday Eurostat disclosed that in order to hide its debt over the past decade, Greece had entered into not one, not two, but a total of 13 different currency swap contracts with Goldman Sachs, all based on the exchange of assorted currencies against the euro as well as one involving a dollar-CHF swap. This was a topic that was all the rage back in early 2010 when it was unclear just how deep the Greek insolvency runs, and was pushed into the open after Zero Hedge first exposed Titlos PLC, an SPV securitization deal by the National Bank of Greece which not took a shady "off the books" currency swap and then securitized it. Since then this story has died down as it has become all too clear just how insolvent not only Greece but all other European countries are, and it no longer matter to haggle over pennies when entire countries subsist day to day purely due to the generosity of the ECB. Yet while Eurostat disclosed the number of the swaps it did not provide detail into just what was contained within these swaps. Which is why back in December, Bloomberg, which recently won a lawsuit against the Fed and achieved release of top secret bank bailout documents, sued the ECB, asking "the European Union’s General Court in Luxembourg to overturn a decision by the ECB not to disclose two internal documents drafted for the central bank’s six-member executive board in Frankfurt this year. The notes show how Greece used swaps to hide its borrowings, according to a March 3 cover page attached to the papers obtained by Bloomberg News." Yet even now that it is all too clear just what the true fiscal situation of Greece and the periphery is, the ECB is still scrambling to hide its secretive and potentially fraudulent practices. Per Bloomberg: "The European Central Bank asked the European Union’s General Court to dismiss a lawsuit seeking the disclosure of documents showing how Greece used derivatives to hide loans and triggered the region’s sovereign debt crisis." The reason provided: "The ECB has complete discretion to decide what it should
publish in the public interest, according to its defense to a
lawsuit filed by Bloomberg News. Releasing the papers could
damage the commercial interests of the ECB’s counterparties,
hurt the region’s banks and markets, and undermine the economic
policy of Greece and the EU, the central bank said." The reason given is the usual one: "Releasing the papers could
damage the commercial interests of the ECB’s counterparties,
hurt the region’s banks and markets, and undermine the economic
policy of Greece and the EU, the central bank said.
" And so the mutual assured destruction pantomime continues unabated, even though everyone knows by now that nothing of the threatened would ever actually happen.

More from Bloomberg:

The documents don’t “provide information that would assist in informing the public debate in any meaningful manner,” the ECB said in its lawsuit. The files “contain ECB’s staff assumptions and hypotheses which were intended to feed the internal deliberations,” the ECB said in papers served today. The notes “were as such made on the basis of partial elements available at the time and not fully accurate information.”

ECB President Jean-Claude Trichet is withholding the documents as EU finance chiefs prepare to meet next week to discuss additional support for Greece, which received a 110 billion-euro bailout ($155 billion) last year. More than four in five institutional investors say Greece will probably default on its debt, according to a Bloomberg Global Poll published today.

And the kicker:

The documents should also be protected to safeguard the effectiveness of the ECB decision-making process, the central bank said. The ECB also challenged the Bloomberg suit on technical grounds. The suit, which is based on the EU’s freedom of information rules, was filed in Luxembourg in December. It requested access to two internal papers drafted for the central bank’s six-member executive board in Frankfurt last year.

So let's get this straight: the ECB's decision-making process relies on shady transactions that involve the use of currency swaps? Interesting. So while we know that the Fed uses curve options to sell volatility and keep rates low, we wonder if the ECB is doing a comparable off-market intervention using the same mechanism that "nobody" knew was being used by Greece for nearly 10 years.

We urge Bloomberg to push for a full disclosure on this matter as we are certain that substantial amount of ECB fraud will be exposed.

h/t Eric

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NidStyles's picture

So they are saying screw honesty. They will threaten market disruption if they don't get their way. So let me ask this, why would anyone think they have Free-Markets with this situation?


I'm growing to think that we need to start killing some people. No trial, no peaceful resolution, just outright killing them.

LawsofPhysics's picture

"They will threaten market disruption if they don't get their way"

Now where have I seen this before?  What was that Volker said before TARP was forced upon congress and the people of the U.S?  What is Timmy telling congress now?  Crash the fucking system already, the sooner we do, the sooner compensation will return to people who are actually worth a shit.

jus_lite_reading's picture

WHAT A FUKKING FARCE! The whole god damned system is corrupt from top to bottom!!! time to start fresh and push the reset button! Greece should lead the way!! DEFAULT ALREADY!

earnyermoney's picture

you mean follow in Iceland's footsteps. They screwed the bankstas and are on the road to recovery.

snakeboat's picture

Bjork Bjork Bjork Bjork Bjork Bjork Bjork Bjork </seal-tone>.

Id fight Gandhi's picture

They'll probably have a big ordeal over the weekend. Sunday night watch the news wires.

Strider52's picture

I still smile at what (someone) said a week or two ago: Too Corrupt to Prosecute". Another favorite is the new name for silver: Unobtainium. Good Stuff.

Thomas's picture

A friend who is high-ranking at Bloomberg declared that "we are going to win this one."

Mallenet's picture

He was talking to you, personal: stupid!

Al Gorerhythm's picture

In person or personally:

rufusbird's picture

I am big on confidentiality myself, but I don't see a need for it in a statement like that. Attorney's do it all the friggin time.

rocker's picture

I surely hope your right Thomas.  If not, the FED can help feed another round of devaluation for us.

It would even be better if somebody could find out who the bond holders actually are ???

Expose the winers and teach them that there is a risk to maintaining a fraud based on greed.

sgorem's picture

re "NidStyles"; Now this guy has the RIGHT FUCKING IDEA!!!!!!!! Kill em all................Amen Brother!

TK7936's picture

"I'm growing to think that we need to start killing some people. No trial, no peaceful resolution, just outright killing them."

Indirectly -thats what they have been doing to the people for centuries

NidStyles's picture

I don't believe in spiteful retribution, or even justifiable killing on the grounds of morality.


I do believe in killing for survival though. We are not going to survive if these people keep this crap up.

Al Gorerhythm's picture

Releasing the papers could damage the commercial interests of the ECB’s counterparties, hurt the region’s banks and markets, and undermine the economic policy of Greece and the EU, the central bank said.

Indirectly alright. Reconstructed into descriptions without the rose colored glasses:-Releasing the papers would expose the true nature and commercial skulduggery of the counterfeiter's(ECB's) as well as their partners, expose the regions loan sharks, expose the Greek's and every EU participating nation as duplicitous liars, the capo dei capi tutti said.

Derpin USA's picture

If someone were put on trial for killing banksters, and I found myself on the jury, and the defendant made a claim of self defense, I would find him not guilty.


Such actions are not murder. They are truly in defense of one's life, liberty and pursuit of happiness.

HowardBeale's picture

Hopefully, Lloyd Blankfein is at the top of your list--as well as that of those who have the means and balls to follow through.

nope-1004's picture

Truth will come out eventually, so why pretend in the interim?  Bank fraud is everywhere.

The entire world has excessive unfunded liabilities that can't possibly be honored.  Time to hit reset and get on with life. 

Hephasteus's picture

You're thinking like a normal sane person.

They'd rather kill us all. Say it's our fault. Say they will never change and how we have to start over and try it again.

centerline's picture

+1.  Class warfare.  Thousands of years later, same shit.

knukles's picture

The term class warfare presumes the oppressed fight.

jbuchal's picture

U.S. Courts have repeatedly adopted the theories here urged by the ECB to keep federal decisionmaking under wraps. I wouldn't be surprised to see the same result here.

chubbar's picture

"Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits." Sir Josiah Stamp, President of the Bank of England in the 1920s, the second richest man in Britain.

LawsofPhysics's picture


The greeks say; "We want to default and live by our own means, come what may."


The world bankers and the ECB say; "You can not default, now be a good debt slave and shut the fuck up!" 

john39's picture

true, but they have not planted any terrorists in Greece, so, they are going to have to come up with something interesting before they start bombing "for humanitarian purposes"

agent default's picture

And these are the  the same guys pushing for more transparency in the markets.  You just can't make this shit up.

rufusbird's picture

Remember the Godfather clip? he's gotta be a team player...right?

TruthInSunshine's picture

Everything is fine in Europe, Greece, all the PIIGSy nations, Japan, the U.S., and with the world and central banks at large.

And inflation is under control, too.

I am highly optimistic smoking my Hopium laced with Moxium, Unobtanium and Plutonium/Cesium/Corium.

05-13 13:32: Starbucks has stopped buying coffee due to price, Reuters reports

DB Cooper's picture

"You people can't handle the TRUTH!"

bob_dabolina's picture

oy vey

Fransn zol esn zayn layb.

willien1derland's picture

Bob shoots HE Scores! And may their wealth be consumed by inflation -

oogs66's picture

Didn't Junker already explain it is necessary to lie sometimes?

Cassandra Syndrome's picture

Medusa Contagion Bitchez

Bam_Man's picture

All fraud, all the time is now required to maintain the pretense that the Ponzi can continue.

What we are witneessing is the end of credit and credit-instruments-as-money.

What will follow is a bifurcated monetary system where all goods and services will carry two prices - one in fiat/credit-money and one in specie.

Rynak's picture

The market as a hostage.

Every one of them should be stripped of all wealth and then be put in jail for 20 years.

hambone's picture

For those who doubt QE(X), Herr Stark makes it very clear nobody will fail, not Greece, not Ireland, not California, not anybody...cause that restructuring would be "too risky" to those in power of remaining in power...their power lies in printing more paper and absent printing, their power is, well, absent.

SAN FRANCISCO (MarketWatch) -- Restructuring Greece's debt is too risky and may have a negative impact on the euro-zone region as a whole without resolving any of the underlying issues, a senior European Central Bank official said Friday. "The notion that one could solve a budget crisis by simple debt reduction is an illusion," Juergen Stark, a member of the ECB Executive Board, said in a speech at an award ceremony in Aachen, Germany. Stark noted that debt restructuring will trigger more uncertainties and lead to slower economic growth, forcing the government to borrow more heavily, according to a translated transcript of the speech. Stark also dismissed concerns that Greece was insolvent and stressed the importance of consistent implementation of structural reform.

Dr. No's picture

"The notion that one could solve a budget crisis by simple debt reduction is an illusion"

But debt increases, now that will do it!

NOTW777's picture

is this what they call a "stress" test

Id fight Gandhi's picture

No, a stress test is a a public farce to spread lies that everything is just fine oe easily fixable.

This is a were fucked moment.

The Greeks seem like they're gaming them right back.

Mercury's picture

"Releasing the papers could damage the commercial interests of the ECB’s counterparties, hurt the region’s banks and markets, and undermine the economic policy of Greece and the EU, the central bank said."


Now cough it up.

AldoHux_IV's picture

It's amazing how less threatening the threat becomes and even more amazing that we have let central banks operate in secrecy for so long and allowed to get away with the biggest transfer of wealth/slavery upon the masses ever.

Arrowflinger's picture

Lesson of this all is clear and evident.

Never, ever trust any third party with your money.

What is hidden is always greater than what is disclosed.




FunkyMonkeyBoy's picture

You know, i've got a niggling feeling that all these Central Banks have got something very sinister to hide.

But, as we all know, you only get poor criminals... it's unheard of that super 'rich' people could be criminals too. Who owns the Central banks of the world again?

Gimp's picture

Keeping up with all the lies and double talk by the Central Bankers is exhausting...I need a Dos Equis

Oh regional Indian's picture

It's all nuclear now. What is unclear is nuclear. All this hidden business can only explode out after so much supression. And it all seems so silly knowing that Fukushima is spewing and Libya is gettign hammered and Palestine is struggling and nuclear fallout has been ongoing for decades....

And here, little men at the ECB playing hide and seek with their cloak and dagger money games.


bob_dabolina's picture

Isn't refusing to release the information a de facto admission of guilt and foul play? Like refusing to take a breathalyzer when pulled over by the police is viewed as an admission of guilt as viewed by the court.

What credibility could the market even allow them? And what's the point of hiding it anyway? It's pretty apparent that most countries are insolvent at this point and are getting shady backdoor bailout deals on the regular.