Ortenzio Matteucci points to towns down the wooded Nerina valley in Italy’s Umbria region and blames peer pressure for his decision to let Polino, population 290, buy a U.S.-inspired financial swap he didn’t understand.
‘Impossible to Understand’ Swap Burns 290-Person Italian Hamlet
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Um….
“When Polino did its swap, the village had a dozen loans from the Cassa Depositi e Prestiti SpA totaling about 547,367 euros, at an average rate of 4.65 percent. The municipality listened to what was pitched as a potentially money-saving plan by bankers from Banca Nazionale del Lavoro SpA in October 2005, said Sabrina Orsini, Polino’s financial director.
The Rome-based Cassa Depositi e Prestiti is a state- controlled lender that provides funds to local authorities for public works investments and other operations. BNL was bought by Paris-based BNP Paribas SA in 2006.
“I knew it was speculative, but interest rates were low,” said Orsini, 38. She added that the town council had given general approval to the idea before she received the actual two- page contract.
On Dec. 15, 2005, Orsini signed with BNL, inking the document with rubber stamps bearing her name and Polino’s seal.”
If you read the full article, you wouldnt be surprised that this was a merrill lynch product, they have made an art of selling crap (look up orange county) which causes loses for investors.