Expert: Financial crisis prosecutions likely in US

ATHENS, Greece - Prosecutions of individuals and institutions involved in the global financial crisis are likely in the United States but far less so in other countries, a prominent expert said Wednesday ahead of an international corruption conference in Greece.

"I'd like to see those responsible for the defaults go to jail," said Barry O'Keefe, a former Australian Supreme Court judge, referring to financial institutions which took on excessive risk in markets and collapsed during the credit crunch.

"It's very difficult to lay blame, but undoubtedly blame (can) be laid with a number of financial institutions. When you tell a lie about money, it's called fraud," he said.

O'Keefe will chair a four-day conference in Athens which opens Thursday and is being organized by Transparency International, a Berlin-based corruption watchdog.

He blamed the crisis largely on banks that bundled high-risk home loans given to low-income families in the United States and sold them on as securities which were promoted as safe investments. He said it would be easier for banks outside the United States to claim they acted in good faith.

"In the United States they have been very vigorous in prosecuting cases like (American energy company) Enron and such people for the financial problems that they find," O'Keefe said.

"As you move from the center to the periphery, to other countries, it's much more difficult to lay blame because when ... you are part of the bank that buys securities that are said to be A-class securities by credit agencies then how can it be said that they have done anything wrong?"

Conference organizers criticized countries that have disbanded their national anti-fraud agencies or replaced agency directors without sufficient justification.

O'Keefe said nine countries had recently taken such action. He said they included Italy, South Korea, Slovenia and Latvia but did not list the others.

Transparency International is widely known for its corruption perceptions index, which ranks 180 countries in an annual survey.

Greece currently ranks in 57th position, one of the lowest for European Union countries. Members with lower rankings are Lithuania, Poland, Romania and Bulgaria. Denmark tops the global index, while Somalia ranks last.

A Greek representative of Transparency International says bribes and other forms of corruption are commonly reported in health services and in planning permission authorities.

About 1,400 delegates are expected to attend the conference.

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