It's raining in the wet for Italian banks: in addition to the well-known problems, another trap is on the way, directly from the City. The ambush comes from a codicil of a seventy-page regulation stipulated on August 5 in London which seems designed on purpose to complicate access to international financing for banks in Italy and oblige them to move their activities to the City: the opposite of what is needed now that the essential raw material for the country is trust.
The turning point takes the form of a change to the rules which, in the case of "transactions in the Italian fixed income market" - reads the August regulation - breaks the ten-year link between the Lch of London and the Italian compensation fund. The City group therefore announces that it will no longer intervene to guarantee global banks engaged in short-term loans should its Italian "ally" go into default.
London's objective is clear: to protect itself from the Italian risk and to encourage the country's banks to come to the City for financing. This would bring Britain the gains on those unseen but day-to-day operations on a colossal scale. In the past, Lch had attempted to relocate the funds of the compensation fund to London, but was stopped by the Bank of Italy a year ago. The central bank has enjoined Cassa to maintain its own accounts in Via Nazionale and to invest them in government bonds.
