Emphasis on the popping. Worth listening to this as you scroll down the below table, compiled by a clearly nostalgic Laurent Fransolet of Barclays Capital…
Alternative title: Moralrisikodämmerung.*
From a Fitch report just out on Wednesday — a twist on the big contagion story of German banking exposure to a Greek default: Read more
The Fed’s Term Auction Facility — started in 2007 to boost short-term liquidity amongst commercial banks — carried a number of caveats.
This was one of them: Read more
Hypo Real Estate — the nationalised German bank and the only one to have failed this summer’s stress tests — passed a(nother) milestone earlier this month.
It transferred assets worth a nominal €173bn to FMS Wertmanagement (FMSW) — the big bad bank set up by the German state earlier this year specifically to take on non-strategic assets and ‘risk positions’ from Hypo. The plan is for the government-guaranteed FMSW to eventually be wound down over the course of 10 years. Read more
The politician at the centre of Europe’s first big criminal trial of the credit crisis has urged banks to stop putting short-term gain ahead of long-term relationships with their customers, the FT reports. Ahead of Thursday’s opening of a trial against JPMorgan Chase, UBS, Deutsche Bank and Depfa, the mayor of Milan rejected suggestions that Italy’s financial centre should have been a more sophisticated investor when dealing with derivatives.
Four banks were charged with fraud on Wednesday for their roles in a €1.7bn ($2.3bn) financing package for the Italian city of Milan in a case that will fuel the global debate about the use of complex derivatives, the FT reports. UBS, JPMorgan Chase, Deutsche Bank and Germany’s Depfa will face trial in Milan after a judge ruled there was sufficient evidence for them to face criminal charges of aggravated fraud for their role in devising a swaps package for the city’s 2005 bond issue. See also FT Alphaville.
Another day, another round of investment banks getting it in the neck over derivatives.
On Wednesday, an Italian judge ordered JP Morgan, UBS, Deutsche and Depfa to stand trial on charges related to a 2005 deal involving Milan and a €1.7bn bond issue. Read more
It would appear Italian prosecutors’ anti-derivatives crusade has stepped up a gear. As Reuters reported Wednesday lunchtime:
An Italian judge ordered on Wednesday four international banks to stand trial on charges four international banks to stand trial on charges stemming from a 2005 derivatives swap for a 1.68 billion euros bond by the city of Milan, legal sources said.
Something tells us the story of Greece’s €1bn currency swap — and particularly the involvement of a bank everyone loves to hate, Goldman Sachs — is going to run and run.
Therefore we are going to republish a large chunk of the original 2003 story from Risk, which has now been unlocked and can be read in full here. Read more
Italian authorities have seized about $300m in assets of four global banks, JPMorgan Chase, Deutsche Bank, UBS and Depfa, whose officials have been accused of fraud, reports the NYT. Italian police seized commercial properties, bank accounts and stock holdings on Monday to assure it could collect from the banks if their officials were found guilty. The seizures stem from the banks’ handling of a $2.2bn municipal bond issue and related swaps that Milan undertook to retire other debt in June 2005.
Several high-profile banks, including Deutsche Bank and UBS, could be caught up in lawsuits over lending agreements with Italian local governments, reports the Daily Telegraph. According to some estimates, Italian authorities could be sitting on €35bn (£33bn) of liabilities relating to bonds they took out in the 1990s, which could turn into Italy’s biggest financial scandal since the Parmalat fraud. Milan has said it is considering legal action against a group of lenders – Deutsche Bank, JP Morgan Chase, UBS and Dublin-based Depfa, part of Germany’s Hypo Real Estate. The group struck a deal to help Milan manage repayments on €1.7bn of bonds it bought to finance public spending. Milan is losing money on the derivatives contract it took out with the banks. Italian police are also investigating the banks’ Milan offices.