There is very little detail that I can unearth regarding the derivatives transactions at Monte dei Paschi di Siena (let us call them MPS shall we). All I can figure out so far is that it is 500+ years old, the Italian Central bank bailed them out yesterday (here) , the head of the Italian Banking Association just resigned, Mario Monti is implicated and so on. The derivatives appear linked to Italian Sovereign debt. Surprise, surprise and shades of MF Global!.
From here the media stories degenerate further into financial pornography. Apparently, MPS were also bailed out six-months ago, says the Guardian (here) for financial troubles relating to an overpriced acquisition. Said acquisition was the purchase of another bank from Santander of Spain. Santander purchased Antonveneta from ABN Amro for 6.6 billion and flipped it a few days later for 9 billion to MPS says the Financial Times (here). Which idiot did due diligence (if any )? All this is part of a story on colorful, Murdochian Emilio Botin of Santander.
In these searches, I came across another FT report on a disclosure by Deutsche Bank (here) on how close they came to insolvency during the financial crisis because of synthetic CDOs. GAAH. Should I watch Downton Abbey instead?
Update: The NYT does a story on MPS (here), says the Antonveneta flip was a few months rather than a few days, but is again more illuminating on the political fall out. It does acknowledge that the transactions still remain opaque.
SGB WEB 