It's Another Tough Day for Titlos, the Tarnished Greek Swaps Deal

Once upon a time, there was a country called Greece. Eager to meet European Union rules on deficits, it decided to improve the appearance of its fiscal health by negotiating an unusual financial deal.

In 2001, Greece began striking a series of "off-market" swap deals with Goldman Sachs, using a currency exchange rate lower than the prevailing market rate. The deals allowed Greece to flatter its debt profile, effectively letting it borrow an extra €5.3 billion ($5.9 billion), according to estimates made by Eurostat, years later. Eventually, Goldman sold its rights to the swaps to the National Bank of Greece, one of the country's biggest banks, which in turn securitized the swap proceeds into a structured finance vehicle with the unimaginative name of Titlos.