Sat Mar 23, 2024 11:33 pm by globalturbo
Oldest Bank In The World Plunges, Halted As Chairman Resigns In Aftermath Of Latest Derivatives Fiasco | Zero Hedge
1 Vote
Submitted by Tyler Durden on 01/23/2013 08:41 -0500
Last week, following documentation from Deutsche Bank (and Nomura), it became clear that Italy’s Monte Paschi (BMPS) bank (the oldest in the world)
has engaged in derivatives with the German and Japanese banks in order
to save itself during the financial crisis. The derivatives, according
to Bloomberg, were done off-market and allowed the booking of large
upfront gains which covered losses optically that the bank faced as
European liquidity dried up completely – the offsetting ‘losses’ are now
coming due. Today, amid growing outcry over the ‘deal’, the former head
of BMPS has resigned. Bloomberg reports
that Giuseppe Mussari, now Italy’s top banking lobbyist, was the
Chairman of BMPS during the derivative deal period. BMPS shares were halted
after plunging dramatically as investors are still unclear of the
extent of losses it faces on derivatives. If that was not enough
chicanery, there is a twist in that none other than Mario Draghi, as Director of the Bank of Italy, would have had to vet Mussari (and his banks’ regulated books) during this period – as BMPS accumulated what is obviously undocumented derivatives positions to intentionally obscure losses. Once again, years later, it seems the truth comes out – and of course we would expect no-one to go to jail – and the lying in Europe (then and now) continues unabated – as the reality of financial system health remains hidden from view.
Via Bloomberg,
1 Vote
Submitted by Tyler Durden on 01/23/2013 08:41 -0500
- Bloomberg News
- Deutsche Bank
- Italy
- Nomura
- None
- Reality
Last week, following documentation from Deutsche Bank (and Nomura), it became clear that Italy’s Monte Paschi (BMPS) bank (the oldest in the world)
has engaged in derivatives with the German and Japanese banks in order
to save itself during the financial crisis. The derivatives, according
to Bloomberg, were done off-market and allowed the booking of large
upfront gains which covered losses optically that the bank faced as
European liquidity dried up completely – the offsetting ‘losses’ are now
coming due. Today, amid growing outcry over the ‘deal’, the former head
of BMPS has resigned. Bloomberg reports
that Giuseppe Mussari, now Italy’s top banking lobbyist, was the
Chairman of BMPS during the derivative deal period. BMPS shares were halted
after plunging dramatically as investors are still unclear of the
extent of losses it faces on derivatives. If that was not enough
chicanery, there is a twist in that none other than Mario Draghi, as Director of the Bank of Italy, would have had to vet Mussari (and his banks’ regulated books) during this period – as BMPS accumulated what is obviously undocumented derivatives positions to intentionally obscure losses. Once again, years later, it seems the truth comes out – and of course we would expect no-one to go to jail – and the lying in Europe (then and now) continues unabated – as the reality of financial system health remains hidden from view.
Via Bloomberg,
Former Banca Monte dei Paschi di Siena SpA Chairman Giuseppe Mussari
quit as Italy’s top banking lobbyist as scrutiny of the lender’s use of
derivatives deepens.
The resignation is effective immediately, he said in a letter posted
to the Italian Banking Association today. He leaves as Monte Paschi,
where he was chairman from 2006 until April, comes under growing pressure to disclose the extent of losses it faces on derivatives.
The lender fell 5.7 percent to 27.75 cents in Milan trading today,
the biggest decliner in Europe’s 46-member Stoxx 600 Banks Index, after
Il Fatto Quotidiano reported Monte Paschi’s former managers signed contracts with Nomura Holdings Inc.
(8604) three years ago that will reduce 2012 earnings by 220 million
euros ($293 million). Nomura said in a statement Mussari “fully reviewed
and approved” the trade.
“I always acted according to the law,” Mussari, 50, wrote. “I took the decision to not damage the association.”
Monte Paschi said on Jan. 17 it will review its accounts after Bloomberg News first reported that the lender engaged in a derivative with Deutsche Bank AG in 2008 that obscured losses
before the Siena-based bank sought a government bailout. The Italian
lender, which was bailed out in 2009, is seeking 500 million euros more
from taxpayers, bringing the total cost of its rescue to 3.9 billion
euros.
Thanks to: http://2012indyinfo.com
