Structured Bond Scandal Revelations Highlight Governance Flaws in Greek State Pension System

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Life & Pensions, the magazine on financial risk management for the global insurance and pension industry, has published an exclusive article on the recent Greek structured bond scandal. Based on exclusive interviews with supplementary pension fund TEAPOKA and others.

The offices of TEAPOKA and the Greek ministry of economy and finance are only a mile or so apart in Athens, but as far as the gap in sophistication was concerned the distance could have been to Mars.

Life & Pensions, the international journal of insurance and pension fund risk management, has published an exclusive article on the recent Greek structured bond scandal. Based on exclusive interviews with supplementary pension fund TEAPOKA and others, the article details:

  • How TEAPOKA was first approached by Athens brokerage Acropolis in November 2006 and why TEAPOKA accepted the proposal to invest in a €280 million structured bond deal
  • How the prospect of sharing in €20 million risk-free profit persuaded the Greek government to issue the bond with the help of investment bank JPMorgan and hedge fund North Asset Management
  • How TEAPOKA believed that information provided by its local custodian, the Bank of Greece, represented a fair market price for the bond
  • How this steadfast belief ultimately forced the Greek government, JPMorgan and North Asset Management to compensate the pension funds in full for their investment
  • How the Bank of Greece was forced to change its client portfolio valuation policy in response to the scandal

Nicholas Dunbar, editor of Life & Pensions, comments: "The offices of TEAPOKA and the Greek ministry of economy and finance are only a mile or so apart in Athens, but as far as the gap in sophistication was concerned the distance could have been to Mars."

"Greek state pension funds have the onerous task of caring for millions of employees but they are very poorly advised and regulated in terms of managing their assets and liabilities."

This story explains to all interested stakeholders just what went wrong and what kind of governance reforms are needed to bring Greece's state pension system in line with other EU countries.

For a copy of the full article or for further information on Life & Pensions magazine please contact:
Nicholas Dunbar, Editor
T: +44(0)20 7484 9819

Simon Drury, Marketing Manager
T: +44(0)20 7484 9953

Notes to editors:

About Nicholas Dunbar
Nicholas Dunbar is a Cambridge and Harvard-educated writer and journalist who is one of the world's leading experts on financial risk management and derivatives. In 2000 he published "Inventing Money: the story of Long-Term Capital Management and the legends behind it". In 2003 he broke the story of how the previous Greek government used giant derivatives deals to evade EU budget targets. In 2005 he launched Life & Pensions magazine.

About Life & Pensions:
Life & Pensions is a monthly subscription-based magazine published by Incisive Media that responds to the need for a greater understanding of risk management by insurance and pensions providers, a diverse community ranging from chief risk officers at multinational life companies to pension fund trustees and actuaries. Life & Pensions has quickly established a reputation for excellence through its unique and top-quality editorial coverage along with in-depth analysis of the latest risk management techniques to the industry. For a free trial visit http://www.life-pensions.com/trial

For more information visit http://www.life-pensions.com

Source: Life & Pensions / Incisive Media

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SIMON DRURY
Incisive Media
+44(0)2074849953
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Nick Dunbar
Incisive Media
+44(0)2074849819
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