BBC 2 Newsnight has just shown an interesting short investigation into potential interest rate swap mis-selling by British Banks to Italian Local Authorities.
The City of Milan has already reached a confidential settlement with some Banks as reported by Bloomberg here:
Italian officials claim that the Italian Local Authorities did not have the ‘technical skills’ to understand these derivatives.
The founding reason for Vedanta (which means Ultimate Truth / Knowledge) is to bring transparency to the derivatives market, especially for British Businesses.
The Newnight program has interviewed former Bankers (including from Nomura). These ‘whistleblowers’ claim they made their concerns clear to the FSA, but were ignored and in one instance asked never to contact the Regulator about this topic again. This is concerning, and undelrines the reason more than ever why the FSA does need strong reform. This is of course already underway, with the new FCA (headed by Martin Wheatley) expecting to be a lot tougher on Banks.
The full Newsnight swaps piece can be seen here: