Italy denies finances at risk from derivatives

Wednesday, June 26th, 2013 | Finance News

MILAN (AP) — The Italian Treasury says that derivatives contracts it signed years ago pose no threat to state finances.

Italian financial authorities also denied in a statement Wednesday that Italy used the potentially risky financial instruments at the end of the 1990s to help the country meet benchmarks for admission to the euro currency union.

Questions about potential risks linked to Italian derivatives arose from media reports that said Italy risks losing 8 billion euros ($10.5 billion) on derivatives contracts it restructured at the height of the eurozone crisis. The reports in La Repubblica and the Financial Times were based on a confidential report by the Rome Treasury.

A derivative is a financial contract whose value is based on an underlying asset, such as a stock or bond.