Derivatives Trial Starts in Italy this week

SHOOT: If the bank lose - and I expect they will, expect further bloodletting of the Euro.

clipped from www.economist.com • A TRIAL on fraud charges of four big international banks—UBS, Deutsche Bank, JPMorgan Chase and the Irish unit of Germany’s Hypo Real Estate—11 bankers and two city officials is set to get underway in earnest in Italy on Wednesday May 18th. A court in Milan will consider accusations that the four banks earned €100m in "illicit profits" from irregularities in the sale of derivatives between 2005 and 2007 linked to a €1.7 billion bond issued by the municipality of Milan. The banks are accused of baffling the city over the costs and benefits of the complex derivatives. If the banks are found guilty other municipalities with derivatives exposures (and potential losses of up to €8 billion) might take similar legal action.