read more from bloomberg...
"While the New York-based bank led by Chief Executive Officer Jamie Dimon has no retail branches in Italy, it didn’t hesitate to sell complex swaps to municipalities over the past decade. In Milan, JPMorgan and its employees are on trial, along with Frankfurt-based Deutsche Bank AG (DBK), Germany’s Depfa Bank Plc and Switzerland’s UBS AG, for allegedly tricking the city into buying the contracts in 2005. The banks deny any wrongdoing.
Across Italy, cities faced with shrinking income and rising expenses bought swaps from JPMorgan, the largest U.S. bank by assets, and other lenders to cut short-term interest costs, putting them at risk of paying more in the long run. Cassino purchased a 22 million-euro ($28.7 million) contract from New York-based Bear Stearns Cos., acquired by JPMorgan in 2008, which switched interest payments on the town’s debt from a fixed rate to a variable one. The rate, a record low at the time the contract was signed in 2003, soared over subsequent years.
About 300 municipalities, from the toe of Italy’s boot to the Alps, were losing a total of 912 million euros on such derivatives as of March,Bank of Italy data show."
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