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07 марта 2013, 01:23

Head Of Communications At Italy's Scandal-Ridden Banca Monte Paschi Has Committed Suicide

It has been several weeks since the name Monte Paschi, likely the most bailed out Italian bank in history, not to mention the oldest bank in the world, graced these pages: with the Italian elections now over and BMPS' political utility as leverage against Italy's Democratic Party finished, we expected that the next time we would read, and write, about it would be the next time it would need a bailout (its fourth in the past four years) sometime in the next 3 to 6 months. Sadly, Monte Paschi is squarely back on the front page following news moments ago that David Rossi, the head of communications at the bank, committed suicide by jumping off the building. From La Repubblica: David Rossi, head of communication of Banca Monte dei Paschi di Siena, was killed this evening by jumping from one office to the headquarters of the institute in Rocca Salimbeni.  Rossi, 51, was the longtime collaborator of the former Number 1 at Monte Paschi, Giuseppe Mussari. Rossi had been raided ten days ago in the investigation on Monte but was not investigated.  On the spot, in addition to the police, it's 118, but the relief effort was useless.   Rossi was for many years a man of representation of MPS and its former president. Among his other responsibilities were marketing and communications. While we have no knowledge of what personal, or professional, matters may have plagued the young man shown in the picture, if this terminal act of desperation is in fact related to the ongoing inquiry against the bank, then it is very likely that things in Italy are about to get very ugly very fast once more. Some more from the Italian press: The association with Mussari was started since 2001, when the former president of MPS and Abi was head of the Foundation, the reference shareholder with 34.9% stake in the bank, and Rossi was responsible for the communication of the institution. No left to imagine the dramatic climax, colleagues who had also contacted in recent days for the latest news on the institution of credit had responded with the same friendliness and professionalism of all time.   Rossi, married, had two children and was well known in the city.   Its commitment to the bank manager, joined also the vice president of the International Center of Art and Culture of Palazzo Te and a member of the board of directors of paint for cultural projects.   In a basket in his office investigators have found a crumpled piece of paper. Above, according to reports, it was written: 'I made ??a bullshit'. A bullshit big enough to take one's life over, and to deprive two children of their father?

10 февраля 2013, 04:47

How A Previously Secret Collateral Transformation With The Bank Of Italy Prevented Monte Paschi's Nationalization

The endless Italian bailout story that keeps on giving, has just given some more. It turns out Italy's insolvent Banca dei Monte Paschi, which has been in the headlines for the past month due to its role as political leverage against the frontrunning Bersani bloc, and which has been bailed out openly so many times in the past 4 years we have lost track, and whose cesspool of a balance sheet disclose one after another previously secret derivative deal on an almost daily basis, can now add a previously unannounced bailout by the Bank of Italy to its list of recent historical escapades. WSJ reports that in the summer of 2011, when Europe was as it tends to do in recent years, imploding and head of the ECB was still Jean-Claude Trichet, and before Goldman was set to control the troika of key world central banks (via NY Fed's Dudley, ECB's Draghi and BOE's Carney), and more importantly when the ECB was being accused of not being a credible lender of last resort, it was the Bank of Italy that secretly bailed out Italy's third largest lender with a €2 billion loan. From WSJ: The €2 billion ($2.7 billion) emergency liquidity loan the Bank of Italy extended to troubled lender Monte dei Paschi di Siena in 2011 was a "classic" central-bank move, although it didn't appear on the European Central Bank's balance sheet and no other Italian bank entered a similar deal, a senior Bank of Italy official said Saturday.   "The Bank of Italy acted on its own" said Fabrizio Saccomanni, the deputy governor of Italy's central bank, when asked about the at-the-time undisclosed securities lending transaction with MPS. The Bank of Italy, having found itself in the middle of the BMPS derivatives scandal and particularly its lack of oversight and disclosure under former head Mario Draghi, is in full damage control scramble. Italy's central bank arranged the loan in October 2011 because MPS was running short of liquidity and had largely exhausted its ability to keep borrowing from the ECB. The loan was aimed at staving off a liquidity crisis at a key Italian bank at a delicate moment in the country's economic history.   The loan wasn't disclosed at the time by either the Italian central bank of MPS. In a conference call shortly after receiving the emergency loan, MPS executives described the bank's liquidity position as sound.   Mr. Saccomanni said that, with its loan to MPS, the Bank of Italy—which was led at the time of the loan by current ECB President Mario Draghi—didn't violate any rules. The loan was "utterly normal central bank behavior," he said. He added, however, that no other Italian bank was party to such an arrangement. Then again, the Bank of Italy said there would be no more secret derivative losses to emerge at BMPS a few weeks ago when the firs two of BMPS' previously unknown balance sheet Easter eggs were reported (while also lying at the time it had no idea of BMPS' balance sheet horrors). This was followed promptly by revelations of two more (for now) such arrangements, one of which with US Bank of New York which "allowed the Italian bank to mislead authorities and smoothed through its acquisition of rival Antonveneta, according to a report by the financial police in Italy." Therefore one can be excused for believing absolutely nothing that any European banker, whether they have worked at Goldman previously or not, has said. What is troubling about the Bank of Italy loan, which only took place because the ECB had in fact been a perfectly qualified lender of last resort, only Monte Paschi had no more eligible collateral against which to receive cash from Europe's central bank, is that it was forced to seek a domestic bailout from the BoI as a true lender of last resort against the most worthless collateral the Siena bank could find. "Under the deal, MPS swapped loans and mortgages for some €2 billion of mainly Italian government bonds." BMP then proceeded to use the Italian bonds with the ECB and to get Euros in exchange, in effect engaging in precisely the kind of collateral transformation alchemy we described previously in painful detail in "Modern Market Alchemy Explained: Converting Junk Debt Into Supersafe Treasurys Out Of Thin Air", only instead of converting Junk into "money good" Treasurys, Monte Paschi used the Bank of Italy as an collateral transformation intermediary converting just as worthless impaired loans and mortgages in the first step, and then using the repo proceeds, Italian bonds, as collateral with the ECB, and thus once again evading nationalization. What the above episode highlights is the fundamental distinction in collateral transformation processes between the US and Europe: while the US has the $35-40 trillion shadow banking system as a conduit for preliminary junk-to-hunk "alchemy", in Europe it is the regional central banks that serve the role of a decentralized shadow bank (which Europe does not have). The only problem is that while the US shadow banking system is largely a private sector construct, in Europe it is the taxpayers who will be fully impaired when the real value of the worthless rehypothecated collateral is exposed. Yet one major similarity is that just like in the US, where as we explained collateral transformation takes place entirely off the books, in Europe this step too was completely secret.  "The loan wasn't disclosed at the time by either the Italian central bank of MPS." At least in the US whenever the Fed provides direct bailout funding via the Discount Window or through excess reserves, it keeps a track of how much (if not who the beneficiary is of course) and discloses this publicly every week. Not so in Europe, and where it gets even worse is that in a conference call shortly after receiving the emergency loan, "MPS executives described the bank's liquidity position as sound." What they didn't describe is why their liquidity position was sound: because the bank had just engaged in a collateral transformation with the Italian people, who were handed off risk that not even the ECB wanted to touch! Of course, had the conference call participants known the truth, it is very likely that BMPS would have been long since nationalized. Yet the worst part of this whole story, is the Bank of Italy's painfully sad attempt at justification of its actions: First - the bold faced lie that only BMPS was engaging in such "shadow" transformations, which will be true until some other bank is revealed to have engaged in an identical junks-for-hunks repo with the Bank of Italy. And second, the BoI's childish explanation that because others in Europe do it, it's fine: "Anyone can do it," Mr. Saccomanni said, adding that similar transactions have been carried out by other national central banks in the euro area. Some central banks, such as those of Greece and Ireland, have used their own balance sheets for such lending to domestic banks, under the Emergency Liquidity Assistance, a special dispensation from ECB protocols. Yes, of course others can do it: the point is that all of them disclose it. The weekly updated balance of Greek and Irish ELA loans has been widely used as an indicator of liquidity and funding pressures in Europe. What Italy did is engage in an identical operation with an insolvent bank, but undisclosed. That the head of the Italian central bank is so naive, gullible or plain stupid, to not realize the difference, is precisely why, as we reported a few hours ago, the Fed has now injected a record amount of dollars into foreign, i.e., European, banks in the last month. Because if "other national banks in the euro area" do it, the implication of course is that they do so undisclosed. Which also means that nobody has any clue just how insolvent Europe truly is, but one does know that the situation now is as dire as it has always been. Otherwise Monte Paschi would not be set to receive yet another bailout in the form of a €3.9 billion state bond to raise it capital for "regulatory requirement" purposes. And the Fed would not have to use all the reserve proceeds created from QEternity to fund European banks. Our advice to all depositors, who we can only hope can be counted on one hand, in Monte Paschi - take your money to a safe bank, and since in Italy that is an oxymoron, it is probably wisest to just park what money one may have in the local Banca dei Materassi.

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02 февраля 2013, 14:31

Fitch подтвердило долгосрочный рейтинг дефолта старейшего итальянского банка

Международное рейтинговое агентство подтвердило долгосрочный рейтинг дефолта эмитента старейшего итальянского банка Banca Monte dei Paschi di Siena (MPS) "ВВВ" со стабильным прогнозом.

29 января 2013, 17:21

Federal Reserve Money Printing Is The Real Reason Why The Stock Market Is Soaring

Dees IllustrationMichael Snyder, ContributorActivist Post You can thank the reckless money printing that the Federal Reserve has been doing for the incredible bull market that we have seen in recent months.  When the Federal Reserve does more "quantitative easing", it is the financial markets that benefit the most.  The Dow and the S&P 500 this month have both hit levels not seen since 2007, and many analysts are projecting that 2013 will be a banner year for stocks.  But is a rising stock market really a sign that the overall economy is rapidly improving as many are suggesting? Of course not. Just because the Federal Reserve has inflated another false stock market bubble with a bunch of funny money does not mean that the U.S. economy is in great shape.  In fact, the truth is that things just keep getting worse for average Americans.  The percentage of working age Americans with a job has fallen from 60.6% to 58.6% while Barack Obama has been president, 40 percent of all American workers are making $20,000 a year or less, median household income has declined for four years in a row, and poverty in the United States is absolutely exploding.  So quantitative easing has definitely not made things better for the middle class. But all of the money printing that the Fed has been doing has worked out wonderfully for Wall Street.  Profits are soaring at Goldman Sachs and luxury estates in the Hamptons are selling briskly.  Unfortunately, this is how things work in America these days.  Our "leaders" seem far more concerned with the welfare of Wall Street than they do about the welfare of the American people.  When things get rocky, their first priority always seems to be to do whatever it takes to pump up the financial markets.When QE3 was announced, it was heralded as the grand solution to all of our economic problems.  But the truth is that those running things knew exactly what it would do.  Quantitative easing always pumps up the financial markets, and that overwhelmingly benefits those that are wealthy. google_ad_client = "pub-1897954795849722"; /* 468x60, created 6/30/10 */ google_ad_slot = "8230781418"; google_ad_width = 468; google_ad_height = 60; In fact, a while back a CNBC article discussed a very interesting study from the Bank of England which showed a clear correlation between quantitative easing and rising stock prices...It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy. Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households. Many said the BOE's easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that  “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it."So should we be surprised that stocks are now the highest that they have been in more than 5 years? Of course not.And who benefits from this? The wealthy do.  In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans. Unfortunately, all of this reckless money printing has a very negative impact on the rest of us.  When the Fed floods the financial system with money, that causes inflation.  That means that the cost of living has gone up even though your paycheck may not have. If you go to the supermarket frequently, you know exactly what I am talking about.  The new "sale prices" are what the old "regular prices" used to be.  They keep shrinking many of the package sizes in order to try to hide the inflation, but I don't think many people are fooled.  Our food dollars are not stretching nearly as far as they used to, and we can blame the Federal Reserve for that. For much more on rising prices in America, please see this article: "Somebody Should Start The ‘Stuff Costs Too Much’ Party". Sadly, this is what the Federal Reserve does.  The system was designed to create inflation.  Before the Federal Reserve came into existence, the United States never had an ongoing problem with inflation.  But since the Fed was created, the United States has endured constant inflation.  In fact, we have come to accept it as "normal".  Just check out the amazing chart in the video posted below... The chart in that video kind of reminds me of a chart that I shared in a previous article... Not that I expect the United States to enter a period of hyperinflation in the near future. Actually, despite all of the reckless money printing that the Fed has been doing, I expect that at some point we are going to see another wave of panic hit the financial markets like we saw back in 2008. The false stock market bubble will burst, major banks will fail and the financial system will implode.  It could unfold something like this... 1 - A derivatives panic hits the "too big to fail" banks. 2 - Financial markets all over the globe crash. 3 - The credit markets freeze up. 4 - Economic activity in the United States starts to grind to a halt. 5 - Unemployment rises above 20 percent and mortgage defaults soar to unprecedented levels. 6 - Tax revenues fall dramatically and austerity measures are implemented by the federal government, state governments and local governments. 7 - The rest of the globe rapidly loses confidence in the U.S. financial system and begins to dump U.S. debt and U.S. dollars. I write about derivatives a lot, because they are one of the greatest threats that the global financial system is facing.  In fact, right now a derivatives scandal is threatening to take down the oldest bank in the world...Banca Monte dei Paschi di Siena, the world’s oldest bank, was making loans when Michelangelo and Leonardo da Vinci were young men and before Columbus sailed to the New World. The bank survived the Italian War, which saw Siena’s surrender to Spain in 1555, the Napoleonic campaign, the Second World War and assorted bouts of plague and poverty. But MPS may not survive the twin threats of a gruesomely expensive takeover gone bad and a derivatives scandal that may result in legal action against the bank’s former executives. After five centuries of independence, MPS may have to be nationalized as its losses soar and its value sinks. google_ad_client = "ca-pub-1897954795849722"; /* 468x60, created 7/28/12 */ google_ad_slot = "9833874419"; google_ad_width = 468; google_ad_height = 60; So when you hear the word "derivatives" in the news, pay close attention.  The bankers have turned our financial system into a giant casino, and at some point the entire house of cards is going to come crashing down. In response to the coming financial crisis, I believe that our "leaders" will eventually resort to money printing unlike anything we have ever seen before in a desperate attempt to resuscitate the system. When that happens, I believe that we will see the kind of rampant inflation that so many people have been warning about. So what do you think about all of this? Do you believe that Federal Reserve money printing is the real reason why the stock market is soaring? Please feel free to post a comment with your thoughts below...This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. var linkwithin_site_id = 557381; linkwithin_text='Related Articles:' Enter Your Email To Receive Our Daily Newsletter Close var fnames = new Array();var ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';fnames[1]='FNAME';ftypes[1]='text';fnames[2]='LNAME';ftypes[2]='text';var err_style = ''; try{ err_style = mc_custom_error_style; } catch(e){ err_style = 'margin: 1em 0 0 0; padding: 1em 0.5em 0.5em 0.5em; background: FFEEEE none repeat scroll 0% 0%; font- weight: bold; float: left; z-index: 1; width: 80%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz- initial; -moz-background-inline-policy: -moz-initial; color: FF0000;'; } var mce_jQuery = jQuery.noConflict(); mce_jQuery(document).ready( function($) { var options = { errorClass: 'mce_inline_error', errorElement: 'div', errorStyle: err_style, onkeyup: function(){}, onfocusout:function(){}, onblur:function(){} }; var mce_validator = mce_jQuery("#mc-embedded-subscribe-form").validate(options); options = { url: 'http://activistpost.us1.list-manage.com/subscribe/post-json? u=3ac8bebe085f73ea3503bbda3&id=b0c7fb76bd&c=?', type: 'GET', dataType: 'json', contentType: "application/json; charset=utf-8", beforeSubmit: function(){ mce_jQuery('#mce_tmp_error_msg').remove(); mce_jQuery('.datefield','#mc_embed_signup').each( function(){ var txt = 'filled'; var fields = new Array(); var i = 0; mce_jQuery(':text', this).each( function(){ fields[i] = this; i++; }); mce_jQuery(':hidden', this).each( function(){ if ( fields[0].value=='MM' && fields[1].value=='DD' && fields[2].value=='YYYY' ){ this.value = ''; } else if ( fields[0].value=='' && fields [1].value=='' && fields[2].value=='' ){ this.value = ''; } else { this.value = fields[0].value+'/'+fields[1].value+'/'+fields[2].value; } }); }); return mce_validator.form(); }, success: mce_success_cb }; mce_jQuery('#mc-embedded-subscribe-form').ajaxForm(options); }); function mce_success_cb(resp){ mce_jQuery('#mce-success-response').hide(); mce_jQuery('#mce-error-response').hide(); if (resp.result=="success"){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(resp.msg); mce_jQuery('#mc-embedded-subscribe-form').each(function(){ this.reset(); }); } else { var index = -1; var msg; try { var parts = resp.msg.split(' - ',2); if (parts[1]==undefined){ msg = resp.msg; } else { i = parseInt(parts[0]); if (i.toString() == parts[0]){ index = parts[0]; msg = parts[1]; } else { index = -1; msg = resp.msg; } } } catch(e){ index = -1; msg = resp.msg; } try{ if (index== -1){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } else { err_id = 'mce_tmp_error_msg'; html = ' '+msg+''; var input_id = '#mc_embed_signup'; var f = mce_jQuery(input_id); if (ftypes[index]=='address'){ input_id = '#mce-'+fnames[index]+'-addr1'; f = mce_jQuery(input_id).parent().parent().get(0); } else if (ftypes[index]=='date'){ input_id = '#mce-'+fnames[index]+'-month'; f = mce_jQuery(input_id).parent().parent().get(0); } else { input_id = '#mce-'+fnames[index]; f = mce_jQuery().parent(input_id).get(0); } if (f){ mce_jQuery(f).append(html); mce_jQuery(input_id).focus(); } else { mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } } } catch(e){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } } } BE THE CHANGE! 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27 января 2013, 22:45

Berlusconi causes outrage by praising Mussolini on Holocaust Memorial Day

Berlusconi's defence of Italy's fascist dictator, and a possible banking scandal on the left, set to electrify election campaignSilvio Berlusconi was accused of being a "disgrace" on Sunday, after choosing Holocaust Memorial Day to praise Italy's fascist dictator, Benito Mussolini.Speaking to reporters at a commemoration event during which he appeared to fall asleep , Berlusconi said Mussolini's antisemitic race laws were the most blameworthy initiative of someone "who, in many other ways, by contrast, did well".He also said Italy "did not have the same responsibilities as Germany" and that Mussolini's co-operation with Hitler was "not entirely conscious at the start".His remarks, apparently intended to cut the ground from under the far right, prompted an outcry from other Italian politicians. Dario Franceschini, the leader of the centre-left Democratic party (PD) in the lower house, said they were a "disgrace and an insult to history and memory".Marco Meloni, the PD's spokesman for institutional affairs, added: "Our republic is based on the struggle against Nazi fascism, and these are intolerable remarks which are incompatible with leadership of democratic political forces."But, as he has repeatedly done ahead of the election on 24 and 25 February, Berlusconi succeeded in grabbing the headlines. His tactics have helped reverse the decline of his Freedom People movement since he snatched back the helm in December.Berlusconi's remarks, combined with allegations at the weekend of a colossal slush fund at a bank traditionally close to the left, looked set to electrify a hitherto lacklustre campaign. The election is crucial to the stability of Italy and the eurozone. Italy's economy is the biggest in the single currency area' troubled periphery, and with huge public debts and scant potential for growth, it can ill-afford a hung parliament.The left-leaning daily La Repubblica reported at the weekend that prosecutors were trying to find out what had happened to €2.6bn (£2.2bn) paid into a London bank account during the 2007 sale of Banca Antonveneta to the world's oldest bank, Monte dei Paschi di Siena (MPS), which has traditionally had links the left.Of the total, €1bn appeared to be for a transaction with an international bank, but the other €1.6 billion was apparently unaccounted for and prosecutors suspected the cash had been drip-fed back to Italy to form a slush fund, the paper said.True or false, the allegations could prove hugely damaging to the front-running PD. Its leader, Pierluigi Bersani, hit back at the party's accusers, saying: "We shall tear them to pieces".It was not clear who might have benefited and there was no suggestion that any other institution involved in the sale had committed wrongdoing. MPS's current management has said it is co-operating fully with the prosecutors.La Repubblica said the prosecutors' findings would be withheld until after polling. But that raised the prospect of a steady trickle of media revelations and allegations in the runup to the vote.The PD is already under pressure over claims of gross mismanagement at Tuscany's beleaguered "red bank". MPS bosses are alleged to have entered into a string of high-risk derivative trades and hidden their losses from the central bank. Berlusconi, whose conservative alliance is catching up on the PD and its allies, said: "If the left isn't up to running a bank, it certainly isn't up to running the country."The prime minister, Mario Monti, whose coalition is lying third, said: "The PD is involved in this affair because it has always had great influence [on MPS]." But Monti too is vulnerable to criticism that he is keeping MPS afloat by putting taxpayers' money at risk. On Friday, shareholders endorsed a second bailout in which the government will lend the bank €3.9bn.The MPS affair could also inject new life into the flagging campaign of the internet-based Five Star Movement (M5S), fronted by the blogger and comedian Beppe Grillo. The M5S has long targeted corruption in high places. The website Termometro Politico, which keeps a running average of poll results, calculated Grillo's movement was set to take around 13% of the vote.With a predicted 37-38% of the vote, the PD and its allies look assured of a majority in the lower house. Under Italy's electoral system, the alliance that comes first gets a bonus to assure it of more than half the seats. But the rules for the upper house are different, and there the PD and the more radical Left, Ecology and Freedom (SEL) party look as if they will fall short of a majority.Since the two houses of parliament have equal powers, that would mean deadlock unless the centre-left found a coalition partner. With Grillo discounting a deal of any kind, the only realistic prospect would be Monti's loose alliance of liberal reformists, conservative Christian Democrats and reconstructed neo-fascists. But that would make for a notably – and perhaps unworkably – heterogeneous cabinet.Silvio BerlusconiItalyEuropeJohn Hooperguardian.co.uk © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

27 января 2013, 00:30

Banca Monte dei Paschi di Siena: A mountain of risk

CONFUSED, shocked and furious. These three words pretty much sum up how shareholders of the Banca Monte dei Paschi di Siena (MPS), Italy's third largest bank and the world's oldest, felt when they gathered on January 25th. The meeting had been called to ask them to put their bank in hock to the state through a convertible bond subscribed by the government of up to €4.5 billion ($6 billion). (When the stock market closed on the day of the meeting, MPS was worth just under €3 billion.) Aimed at bringing the bank's capital ratios up to scratch, the state aid, which was approved by the shareholders, comes at an eye-watering price: MPS will pay 9% interest, and the rate will increase starting next year.