Italy On The Move To Crush Banksters

A series of claims and court cases against banks and rating agencies in Italy is the sign of a lynch-mob sentiment in the population. It is not an accident that those institutional actions occurred a few days after the vote in the Parliament for a EU7.5 billion bailout of Italian banks from the Bank of Italy.

1. Standard & Poor’s, Moody’s, and Fitch have been subpoenaed by the general prosecutor at the Italian Court of Accounts (Corte dei Conti), who is demanding EU234 billion in damages for the downgrading of Italy’s sovereign debt in 2011, which unleashed the financial crisis that led to the demise of the Berlusconi government.

The story was first reported by the Financial Times on Feb. 5, and confirmed by Italian sources. However, the case is in the pre-trial phase and it might never come to a trial, sources at the court said.

The auditor, the FT writes, is considering whether “reckless” rating agency reports on Italy’s public debt contributed to a worsening of the sovereign debt crisis. “While it remains uncertain whether the claim will be brought, the auditor’s dramatic threat — and the size of damages it has suggested — reflect anger in European political circles at the role played by rating agencies in the market turmoil that threatened the Eurozone.”

S&P formulaically rejected the claim as “frivolous and without merit,” stressing that, among other things, the Court wrote: “S&P never in its ratings pointed out Italy’s history, art or landscape which, as universally recognized, are the basis of its economic strength.” But exactly this allegation which S&P rejects as “frivolous” contains a kernel of truth, in the sense of the real source of productivity and ultimately of economic potential of a nation.

2. In Milan, the prosecutor at the appeal trial against Depfa, Deutsche Bank, UBS, and JP Morgan for the derivatives scam against the Milan municipality, has upheld the request of a EU3 billion fine for the banks and jail terms of six months for up for four managers; however, he asked for an acquittal of the other five managers.

3. In Naples, regional governor Stefano Caldoro has announced a lawsuit against banks that sold about EU3 billion in derivative contracts to the regional administration from 2003 to 2006. Starting in 2009, the contracts have produced high losses to the administration, which now claims they are “illegitimate.”

This entry was posted in Austerity & Bank Bailouts, Banking System, Glass Steagall and tagged , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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