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I have a copy of the ISMA study if anyone wants one. Do we have any idea of why ISMA would do such a study? LucianoSteve@intesabci.it on 11/06/2001 06:50:07 AM To: RPICKEL@isda.org cc: BOARD@isda.org, RAinslie@isda.org, esebton@isda-eur.org, rmetcalfe@isda-eur.org 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 Page 1 of 1 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 -----------------------------====================------------------------------ ############################ END OF STORY 1 ############################## This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of J.P. Morgan Chase & Co., its subsidiaries and affiliates.
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