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The fiscal debacle in Greece is at least partly connected to minimizing (hiding?) deficits. Greece borrowed billions via currency swaps, but the fix was only temporary and the red ink has come back to haunt the country. (Gee, where have we heard this one before?)

Now the Fed is reportedly investigating the associated transactions, which were engineered by Goldman Sachs (NYSE:GS) and other banks. Exactly where this leads is anyone's guess, but the not-so-subtle implication is that Wall Street had a hand in undermining the fiscal stability of Greece. Or perhaps it's more accurate to say that the big banks helped feed a country's addiction to debt.

Banks are facilitators, of course. They provide monies to borrowers, one way or another. But sometimes the facilitator crosses the line. Figuring out where that line lies is never easy, although hindsight is 20/20.

What makes the situation with Greece particularly troubling is that the country really couldn't afford to borrow the billions that the banks helped it tap. (Yes, that sounds familiar.) What's more, the borrowing was done on the sly. While it all appears to be on the level in terms of the regulatory rules of the European Union, it's not known if that standard will hold up under what's sure to be intense scrutiny in the months ahead.

In any case, Greece's red ink is fast becoming a political topic in Washington. "I’m coming to the conviction that many times these devices are used to avoid regulatory constraints,” Senator Reed (D-Rhode Island) tells the New York Times. “In the case of Greece it might have been strictly legal, but clearly the intent was to avoid the budget limitations and budget restrictions of joining the European Community.”

Meanwhile, Fed Chairman Ben Bernanke via BusinessWeek advises that "using these instruments in a way that intentionally destabilizes a company or a country is -- is counterproductive, and I’m sure the SEC will be looking into that. We’ll certainly be evaluating what we can learn from the activities of the holding companies.”

Sounds like the start of yet another round of hearings in Washington, with a front-row seat reserved for at least one large financial institution with offices in lower Manhattan.

As for the international perspective, it's unclear how many other countries might be on the hook for similar transactions, but there may be a few more. Rest assured, the tide will eventually go out and all will be clear soon enough. Meantime, one might wonder if a lot of this is really just a game of musical chairs. If so, the music has stopped and there's more than a few sovereigns looking for seats.

Brian Love of Reuters recently wrote that Greece's problems with debt "mark a new phase in global financial crisis." The full ramifications of that statement have only just started to leak out.

Source: Greece, Currency Swaps and an Expensive Game of Musical Chairs