Last Updated on February 15, 2013
This happened a couple days ago but I haven’t heard anything about this in the mainstream media. Surprise!! The simple version is that Italy’s Mote Paschi (BMPS) Bank engaged in derivatives trading to cover their losses on paper when the liquidity in the European Market dried up. This came to light, the head (Mussari) was let go and probably retired to his own private island a zillionaire and everyone who was invested in this bank was left high and dry.
We will have to wait and see what the fallout from this is. How does this relate to Prepping? If you have all of your tangible resources in a bank or other financial institution, can you imagine what would happen if this were your bank?
Source: Zero Hedge
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.