Bank Of Italy Throws The Book At Monte Paschi For "Hiding Derivative Documents"

Tyler Durden's picture

As we reported previously, the stock of the oldest bank in the world, Italy's venerable Banca Monte Dei Paschi of Siena, was halted in early trade after plunging on news that the bank had engaged in not only the previously reported secret derivative transaction with Deustche Bank to hide losses before a prior government bailout, but yet another derivative transaction, this time with Nomura, signed three years ago and whose intention, ironically, was to reduce 2012 earnings by some €220 million.

What the ultimate purpose of these deals was is still unclear and will likely become apparent eventually, however it will likely require the former Chairman of the bank, Giuseppe Mussari, who served as Chair from 2006 until April 2012, and who officially quit his post as Italy's top banking lobbyist after today's revelations, to testify. One person whom he may testify against is none other than current ECB head Mario Draghi, who just happened to be the head of the Bank of Italy from 2006 to 2011, or the entire period when Monte Paschi was engaging in what increasingly appears to have been fraudulent activity.

But don't worry: just like in the US, nobody of signfiicance is about to go down for this "glitch" which is about to be blamed on some poor mid-level shmuck, and which nobody in the senior level management had any idea about, and certainly not the person who ultimately would have had to give the green light: the current head of the ECB. Sure enough from Bloomberg:


It was all Fabrice Tourre's fault. Or better, yet: an algo did it!



Would it be the same magistrates who are also reviewing Berlusconi for "alleged" sex with minors?

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Neethgie's picture


EnslavethechildrenforBen's picture

Oh so now Bankers are law enforcement?

nope-1004's picture

Bankers are the law.  In-fighting is expected, given the fact that they're all insolvent and there simply isn't enough to plug the gaping holes.


DoChenRollingBearing's picture

Derivativi, putane!

Coming to US banks near us soon?

Lost Wages's picture

They probably won't throw the book at him. Maybe a pamphlet.

waterhorse's picture

or a packet of money as a bonus for a job "well done".

Dr. Engali's picture

The janitor did it and he has summarily been removed. Nothing to see here...move along.

Pharming's picture

You mean to tell me that this...this...whole mess is possibly from corruption?


I'm going back reading, "Dreams of My Real Father"...

Exec order third term addition.

Hondo's picture

The entire global banking system, including the US, is a sieve of corruption.  No one can convince me they have any idea of the exposures on the balance sheets of these corrupt entities...

LetThemEatRand's picture

It was a one armed man that did it.  I swear.

youngman's picture

Well as long as he did not lose any of the Mafia´s money ....all is Capiche

caimen garou's picture

ask that blind man, he saw who done it! corzined

unrulian's picture

oops they lands in trash can

LawsofPhysics's picture

A banker going to jail and being stripped of all personal wealth in the western world?  Riiiiiggghhht.  I'll believe it when I see it.

ziggy59's picture

In a real democratic country like china, and iran, they would have sharp surgical steel suspended about 4 ft , well 1.2 meters in those countries, above these lying friggin crooks' necks.

Or rope, Saddam style

Meatballs's picture

Let the Italians worry about this. We have our own fish to fry.

jubber's picture

Mario will obviously do the right thing and resign first thing in the morning, as this makes his current position untenable.

Miss Expectations's picture

Since this is an Italian thread, here's my favorite Serpico compilation:

waterhorse's picture

Iceland, China and Iran know what to do with corrupt financial parasites (aka "bankers").

Bunga Bunga's picture

Don't worry, the criminals are cooperating with the other criminals now. All will be fine.


PaperBear's picture

Would Bank of Italy be one of those central banks that hide gold loaned out (never to be returned) alongside the gold on deposit ?

Uskatex's picture

Bank of Italy and Bank of Germany were the only banks that did not loan out gold. In Italy it was because there are so many laws and regulations, that it was practically impossible for a publicly ruled body as the BoI to loan gold.

Both banks have a substantial percentage of their gold in US, UK and France, however. Regarding this gold I would not bet it was not loaned out, but not by BoI and BoG.

falak pema's picture

when you are my Draghi, when you are my Monti how can I not go Python for your charms; Draghi, Monti.. Monti, Draghi, you are so sweet as honest brokers of Euro thrills. I love u two paladins of Euro triumph for ever; and shame on Berlu for being a bunga bunga shill.

To convince you of my eternal love for your work to enhance Euro union I am sending you Nigel Porridge for you to make him an eater of Italian spaghetti and mozarella for ever.

Avanti!  Forza Italia.

Monte Paschi the bankstas of the Vatican, hahahaha ! Hiding financial indulgences and calling them papal indulgences! Tut tut! 

Poor Pope who will lose his crown jewels like down the shute when he poops. What an humiiation for a man of good faith and nothing more, to sing for his lost millions. What is the world coming to.

Uskatex's picture

Until 2007, Monte dei Paschi of Siena was a medium Italian bank relatively in good shape. It was traditionally ruled by managers "close" to Democratic Party (ex-Communist) and perhaps Masonry, but since Siena is within a "red" Italian region, this was accepted.

In 2007 Santander Bank bought in Italy the Banco Ambrosiano Veneto, paying 6.6 billions Euro. BTW, 30 years ago Banco Ambrosiano was a bank closely linked to Vatican, that went bankrupt in 1982, and whose managing director was found hanged under Blackfriars Bridge in London (

Santander soon realized that BAV acquisition was a poor deal, hived off Interbanca, a good bank owned by BAV worth 1-1.5 billions, and started to look for a buyer.

The buyer was MPS, that bought BAV (without Interbanca) for 10 billion euros!!! Nobody knows where the difference between a "fair" price of 4-5 billions and the actual price went. Prosecutors are investigating...

This operation, sponsored by the Democratic Party and swiftly approved by the Bank of Italy (whose chairman was Draghi at the time), is the source of all the troubles of MPS (and is the reason I will never vote Democratic Party anymore).

Uskatex's picture

Just to add some more Italian rumors... Some believe that the bankrupt of Banco Ambrosiano, an Italian bank owned by the Vatican, in 1982 was due to the fact that the Pope himself (John Paul II) ordered to use the bank's assets to fund Solidarnosh Polish union, that was fighting against the communist party. Other rumors say that the Mafia lost a lot of money in this bankrupt (a Vatican bank should be safe, after all...), and the death of its chairman Roberto Calvi, found hanged under Blackfriars Bridge (nomen omen) has something to do with it.

After 25 years the bank that succeeded to Banco Ambrosiano was sold, and 5 billion euros were lost in the deal. Maybe that Mafia got back their money, after all.

ziggy59's picture

Is it 3 card monte or the 3 montes are cards?

Salah's picture



trendybull459's picture

Al of you in the banks hands,withdrow your money from branches and keep safely under matraze,its not wirth to risk it for playing by it derivatative schemes of which you will be aware on bank bankrupcy closure

trendybull459's picture

its not worth holding your money in the bank accounts for things they do behind of your back while you sure they hold your money

Stormtower's picture

And in other news.......Catalonia approves it's independence.....


Hobie's picture

What have we got? Magnificence!

Joe Strummer was a man ahead of his time. And the lyrics to Magnificent Seven are timeless. 

Ring! Ring! It's 7:00 A.M.! 

Move y'self to go again 

Cold water in the face 

Brings you back to this awful place 

Knuckle merchants and you bankers, too 

Must get up an' learn those rules 

Weather man and the crazy chief 

One says sun and one says sleet 

A.M., the F.M. the P.M. too 

Churning out that boogaloo 

Gets you up and gets you out 

But how long can you keep it up? 

Gimme Honda, Gimme Sony 

So cheap and real phony 

Hong Kong dollars and Indian cents 

English pounds and Eskimo pence 

You lot! What? 

Don't stop! Give it all you got! 

You lot! What? 

Don't stop! Yeah! 

Working for a rise, better my station 

Take my baby to sophistication 

She's seen the ads, she thinks it's nice 

Better work hard - I seen the price 

Never mind that it's time for the bus 

We got to work - an' you're one of us 

Clocks go slow in a place of work 

Minutes drag and the hours jerk 

Wave bub-bub-bub-bye to the boss 

It's our profit, it's his loss 

But anyway lunch bells ring 

Take one hour and do your thanng! 


What do we have for entertainment? 

Cops kickin' Gypsies on the pavement 

Now the news - snap to attention! 

The lunar landing of the dentist convention 

Italian mobster shoots a lobster 

Seafood restaurant gets out of hand 

A car in the fridge 

Or a fridge in the car? 

Like cowboys do - in T.V. land 

You lot! What? Don't stop. Huh? 

So get back to work an' sweat some more 

The sun will sink an' we'll get out the door 

It's no good for man to work in cages 

Hits the town, he drinks his wages 

You're frettin', you're sweatin' 

But did you notice you ain't gettin' anywhere? 

Don't you ever stop long enough to start? 

To take your car outta that gear 

Don't you ever stop long enough to start? 

To get your car outta that gear 

Karlo Marx and Fredrich Engels 

Came to the checkout at the 7-11 

Marx was skint - but he had sense 

Engels lent him the necessary pence 

What have we got? Yeh-o, magnificence!! 

Luther King and Mahatma Gandhi 

Went to the park to check on the game 

But they was murdered by the other team 

Who went on to win 50-nil 

You can be true, you can be false 

You'll be given the same reward 

Socrates and Milhous Nixon 

Both went the same way - through the kitchen 

Plato the Greek or Rin Tin Tin 

Who's more famous to the billion millions? 

News Flash: Vacuum Cleaner Sucks Up Budgie 



Dollar Bill Hiccup's picture

Draghi is teflon folks, move along, nothing to see here.

The OMT, which hasn't been used, in conjunction with FED, BoJ, BoE et al printing, has the EURUSD heading back toward the mid 1.30s. It will overshoot to the upside.

Nothing to be done swimming against the current of concerted Central Bank action.

This could go on, as it has, for years. Since now it seems to be working, they will do the only thing they know how to and press their bets, and in so doing inflate assets bubblelisciously.

mr_nice's picture

drakes was too busy assisting raids on smaller entities to notice the clusterfuck that was happening at MPS. His predecessor at bank of italy was impeached big time because he wouldn't let antonveneta be sold to foreigners -- it was after they ousted him. and then it was sold again to santander.. and then it was sold again to MPS at an outrageously inflated price ; they paid 9.6B for what santander paid 6B 3 months before -- only santander got to keep the juicy parts. Now they're all trying to blame the clusterfuck on derivatives, while deriv losses are a meager 0.7B.. and the shortfall more like 5B. You can be sure someone got filthy rich out of this transaction and it wasnt just santander.