Italian bank Monte Dei Paschi di
Siena (MPS) said Tuesday its exposure toward Japanese bank
Nomura soared to 4.69 million euros by the end of March, up 693
million euros since the end of 2014.
The meteoric rise in liability, reported in the MPS interim
report, was an effect of the derivatives deal dubbed Alexandria,
and was directly due to increased risk associated with a Long
Term Repo (LTR) operation worth 575 million euros and collateral
paid of 146 million, the bank said.
Former executives of MPS and Nomura bank entered into a
contract in July 2009 involving the restructuring of the
complicated financial instrument dubbed Alexandria.
Investigations since then have focused on the role former
bank executives may have played in hiding losses.
The MPS interim report said the bank was addressing the
European Central Bank's (ECB) assessment, but until the ECB had
completed its review, MPS was obliged to report its liabilities
according to previous ECB guidelines.
MPS was named last year by the ECB after a health check
that showed a 2.1-billion-euro capital gap, which the Siena bank
is now trying to fill.
"If anyone needs to be concerned, it's Normura," MPS
Chairman Alessandro Profumo said last month of worries
surrounding its exposure.
"Nomura must pay the damages".
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