Please let us know if there is anything that we should NOT do or say in
relation to this in order not to harm the relationship with the Italian
regulators.
----- Original Message -----
From: "Luciano Steve" <LucianoSteve@intesabci.it>
To: "Robert Pickel" <RPICKEL@isda.org>
Cc: "ISDA BOARD" <BOARD@isda.org>; "Ruth Ainslie" <RAinslie@isda.org>;
"Emmanuelle Sebton" <esebton@isda-eur.org>; "Richard Metcalfe"
<rmetcalfe@isda-eur.org>
Sent: Tuesday, November 06, 2001 8:50 PM
Subject: Re: ISMA study on derivatives use by governments


> Today's FT (page 6 of the European edition) reports fully and faithfully
about
> the debt management via swaps of the Italian Treasury, and about the Yen
> transaction that was apparently singled out in the ISMA study. Eurostat
has
> always been aware of the transactions, that have been specifically
approved. I
> attach a Bloomberg release on the issue. It is interesting that the ISMA
study
> is no longer available on ISMA web site. Also, I don't see in today's news
any
> trace of the press conference announced in the ISMA press release.
>
> Luciano Steve
>
> Robert Pickel wrote:
>
> >  <<ISMA.pdf>> Attached is a copy of a press release from ISMA regarding
a
> > study that they are releasing regarding the use of derivatives by a
European
> > government allegedly to facilitate its entry into EMU. This was reported
on
> > in the newspapers today. We are checking on the nature of the study. Any
> > information any of you can provide would be appreciated.
> >
> > Bob
> >
>
  ------------------------------------------------------------------------
> >                       Name: ISMA.pdf
> >    ISMA.pdf           Type: Acrobat (application/pdf)
> >                   Encoding: base64
> >            Download Status: Not downloaded with message
>
>


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> ANS 06:23 STATE AUDITOR OFFENDED OVER EMU ALLEGATIONS
>
> R ECS BLG XQKH
> STATE AUDITOR OFFENDED OVER EMU ALLEGATIONS
>
>     (ANSA) - Rome, November 6 - Italy's State Auditor General
> Andrea Monorchio today said he was "deeply offended" by
> allegations in the foreign press that Italy had "juggled the
> books" in order to qualify for European Monetary Union (EMU)at
> the end of the 1990s.
>      The allegations, appearing in Britain's Financial Times and
> The Guardian, as well as the Wall Street Journal, involved
> Italy's use of a currency swap to "disguise" the exact amount of
> its deficit in order to meet the parameters to join the euro.
>   According to Monorchio, these allegations were "mental
> masturbation."
>      Yesterday's press reports were based on a report by the
> International Securities Market Association (ISMA), a
> self-regulatory organization, and the Council on Foreign
> Relations, an independent US-research group, in which a case was
> outlined where a European country appeared to have used the
> derivatives market to hide the exact size of its budget deficit.
>      Although Italy was never named in the report, the FT said,
> the report cited a case in which a 1995 bond issue was used in a
> 1997 currency swap aimed at temporarily reducing a country's
> budget deficit. This example, the FT said, coincided exactly
> with what happened with Italy's 1995 200 billion yen bond issue.
>      Italy's qualification for EMU was orchestrated by
> then-Premier Romano Prodi, now president of the European
> Commission, and then-Treasury Minister Carlo Azeglio Ciampi,
> Italy's current head of state.
>      "I am deeply offended," Monorchio said on the sidelines of
> a meeting here with the Industrialists Union, "I worked very
> long and hard with Ciampi. We closed 1997 with a spending
> deficit of 2.7% (of GDP) because the European Union would not
> allow us to calculate nine trillion lire in revenue from the
> sale of gold reserves. Otherwise our budget deficit would have
> been, according to Eurostat, 2.4-2.5%."
>      After recalling that the EU yesterday was quick to deny
> that Italy had in any way juggled its books, Monorchio added
> "Can anyone seriously imagine someone like President Ciampi
> involved in such skulduggery?"
>      "I myself am just a simple accountant and intend to remain
> one," he concluded.
>
>      FA
> -0- Nov/06/2001 11:23 GMT
>
>
>
>
>
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