Analysis: Italy has a derivatives time bomb about to blow

03/12/2010 | Reuters

Financial markets, regulators and industry insiders have focused on Greece's debt woes and the role derivatives played in the crisis. Italy, however, also has a derivatives debacle on its hands that stretches across hundreds of cities, according to Reuters. Local governments were keen to reduce their financing costs and did so through complex derivatives contracts. Reuters notes that when interest rates increase, many cities will face substantial losses, prompting them to work to get out of the deals.

View Full Article in:

Reuters

Published in Brief: