Bloomberg files lawsuit against European Central Bank

Bloomberg LP, the parent of Bloomberg News, filed a lawsuit Wednesday that asks the European Union’s General Court in Luxembourg to overturn a decision by the European Central Bank not to disclose documents that show how Greece used derivatives to hide its fiscal deficit.

Bloomberg editor in chief Matthew Winkler appeared on Bloomberg Television on Wednesday to talk about the suit. Winkler said, “It’s very straight forward. We are seeking full disclosure of documents that show how Greece was able to finance itself into a predicament that became the European debt crisis as we know it. It’s entirely to the benefit of all the members of the EU, all of the citizens, all the taxpayers and for sure the financial markets. Transparency is something that has a way of enlightening perspective.”

Winkler also commented on the derivatives Bloomberg is seeking more information on:  “In this case, very complicated, intricate financing techniques were deployed to essentially enable Greece to put off consistently any kind of transparent reckoning of its indebtedness. That’s really at the heart of this case and that’s really why we are seeking these documents.”

Winkler also spoke about Bloomberg’s earlier FOIA suit, saying, “We’ve just received a voluminous record of documents from the Federal Reserve, belatedly, having to do with the U.S. financial crisis and actually the transparency that resulted from the Dodd-Frank law was good for the market and good for bank stocks. They actually rallied with more information.”

About the reasons for initiating the lawsuit, Winkler said, “What got our interest in the first place was the use of interest rate swap, which are extremely complicated and conceived in the dark…literally. Financing in the dark is a primarily reason why the financial unraveling occurred in 2007 and where there is a debt crisis with respect to Greece that has afflicted the rest of the European Union.”

Bloomberg’s story about the lawsuit can be found here.