Italy could face more swap terminations
Italian politicians claim Morgan Stanley's swap termination in January will be a one-off - but dealers say Italy's debt office is subject to other clauses that could have the same effect
Italian politicians were involved in a tense exchange last month over four derivatives trades between the Dipartimento del Tesoro – the country’s debt office – and Morgan Stanley, which were terminated by the US bank in January, forcing Italy to pay out €2.567 billion.
That was a unique situation, according to Italian education undersecretary Marco Rossi Doria, whose remarks were published in parliamentary transcripts on March 15. He said the trades contained alternative termination event (ATE)
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