However, all those who have experienced the unprecedented destructive subprime mortgage financial tsunami, even a few years after the financial tsunami has passed, are afraid of financial derivatives, and even talk about tiger changes.

So just now, when he heard Wu Minghao mention financial innovation, and it was also the financial innovation of Goldman Sachs Group, Qiao Tianyu instinctively became vigilant.

You must know that although Qiao Tianyu has worked in Goldman Sachs Group for many years in the previous life and has a lot of feelings for Goldman Sachs Group, it has to be said that in the area of financial innovation, Goldman Sachs Group has a bad record and even a bad reputation.

To put it simply, the most notorious financial innovation of Goldman Sachs Group is also the most vivid interpretation of what it means to "drink to quench thirst"!

In 2001, at the critical juncture of joining the eurozone, Greece, which had been working for the eurozone, was worried.

According to the Maastricht Treaty signed by Europe in 1992, EEMU member states must meet two key criteria:

The budget deficit should not exceed 3 per cent of GDP and the debt ratio should be less than 60 per cent of GDP, both of which could not be met by the hopes of the time.

Faced with the eligibility criteria to be kicked out of the eurozone, Goldman Sachs stepped up, and a female executive named Antigni Laudiadis helped Greece devise a sophisticated behind-the-scenes trading strategy, known as "currency swap trading."

Helped Greece successfully cover up a public debt of up to 1 billion euros, thus meeting the criteria of eurozone membership, and forcefully bringing Greece back into the eurozone.

Of course, this kind of currency swap trade, which is called the "financial innovation" of Goldman Sachs Group, is more brain-burning, and interested friends can read it.

Greece issued a $10 billion (or yen and Swiss franc) treasury bond of 10 to 15 years, which was listed in tranches.

The Goldman Sachs investment bank is responsible for converting the dollars provided by Greece into euros. By the time this debt matures, it will still be exchanged back in dollars by Goldman Sachs.

If the exchange is calculated at the market exchange rate, there is no article to do. In fact, Goldman Sachs' "brainstorm" was to artificially create an exchange rate that would allow Goldman Sachs to lend large sums of cash to Greece without showing up in Greece's public debt ratio.

If 1 euro equals $1.35 at market exchange rates, Greece would receive 7.4 billion euros for issuing $10 billion. Goldman Sachs, however, used a more favorable exchange rate, giving Greece 8.4 billion euros.

That is, Goldman Sachs actually lent Greece 1 billion euros. But this money did not appear in Greece's public debt ratio statistics at the time, because it would not be returned until 10 to 15 years later.

As a result, Greece has this cash income, leaving the national budget deficit at only 1.5 per cent of GDP on paper, when in fact Eurostat recalculated in 2004 and found that the deficit was actually as high as 3.7 per cent, which is above the norm.

It was later revealed that Greece had a real budget deficit of 5.2% of its GDP at the time. Far below the prescribed 3%.

In addition to this loan, Goldman Sachs has devised a variety of ways for Greece to accumulate wealth without increasing its debt ratio.

For example, the future income of the national lottery industry and aviation tax is used as collateral in exchange for cash, which is not a liability in statistics, but becomes a sale, that is, the securitization of bank debt.

Of course, Goldman Sachs' services and loans were not provided for free, and Goldman Sachs received a total of up to 300 million euros in commissions.

Goldman Sachs is well aware that Greece's entry into the eurozone through this means will inevitably lead to long-term economic foresight and eventually a lack of ability to pay.

To prevent its investment from going down the drain, Goldman Sachs purchased a 20-year €1 billion CDS "credit default swap" insurance from a German bank so that the underwriters could cover the shortfall in the event of a payment problem.

Therefore, because of the consequences of this "financial innovation", it directly led to the occurrence of the Greek debt crisis that shocked the world in 2009, and plunged the Greek economy into the abyss of collapse and almost no return, and truly "quenched thirst by drinking"!

However, Goldman Sachs knew that it was a glass of poisonous wine, but it didn't care whether Greece lived or died, and pushed Greece into the abyss of no return in order to make money.

However, Goldman Sachs Group made a lot of money because of this transaction, which naturally became the biggest stain in the history of Goldman Sachs Group's "financial innovation", and there is no one!

The above stories and cases about financial innovation are just to let you know more intuitively what is real financial innovation and how big the "side effects" of financial innovation are!

Of course, financial innovation is not useless, it is undeniable that since World War II, Wall Street in the United States has risen rapidly with financial innovation and developed into a powerful existence that can compete with the old financial empire of Britain!

As mentioned earlier, after Lehman Brothers became independent from American Express in 1994, under the leadership of Fulder, the iron-blooded president, they held high the banner of financial innovation, thus rising rapidly and returning to the list of the "five major investment banks on Wall Street".

Therefore, there is a good side to financial innovation, and there is naturally a bad side, but Goldman Sachs Group really has a bad "reputation" in this regard.

Therefore, Qiao Tianyu, as a "veteran employee" of Goldman Sachs Group, was even more vigilant after hearing about the financial innovation DBLP of "diplomatic bonds".

"Mr. Wu, what do you mean by DBLP just now? Could you please tell me more about it?" Qiao Tianyu asked impatiently.

"Hey, okay, we've been miserable by that DBLP!" DBLP is Wu Minghao's nightmare, and Wu Minghao sighs again and again at the mention of this word.

"Well, at the secret meeting of the 'diplomatic bonds' at that time, the representatives of the Goldman Sachs Group proposed that in the early days of the 'diplomatic bonds' issuance, they Goldman Sachs purchased as much as $150 billion of 'diplomatic bonds' on the orders of the US Treasury Department. ”

"During the period of bond holdings, global inflation has been high, and not only have they suffered heavy losses, but the 'diplomatic bonds' have taken up a lot of capital space, making Goldman Sachs lose the flexibility of capital transactions. ”

"So many times Goldman Sachs Group wanted to sell its 'diplomatic bonds' to stop losses, but the U.S. Treasury Department refused to accept the sell-off application for fear of causing market panic and did not allow Goldman Sachs Group to sell 'diplomatic bonds'. ”

"Since the 'diplomatic bonds' cannot be sold, Goldman Sachs Group at least needs to clean up the capital space and minimize the impact of the capital space occupied by the 'diplomatic bonds' on the group's other trading activities, so they organized the best financial engineering of the Goldman Sachs Group to develop DBLP. ”