Italy freezes assets in derivatives case: police

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Italian police have seized 17 million euros (24 million dollars) from a bank belonging to France's BNP Paribas as part of an inquiry into derivatives sold to local governments, the police said on Thursday.

Two cities in Sicily, Messina and Taormina, are suing the bank, BNL, which sold them the derivatives. Eight BNL employees in Rome and Sicily are already under investigation as part of the investigation which opened in 2009.

Numerous local administrations in Italy have been struggling with derivative deals that turned against them during the economic crisis in 2009.

Prosecutors allege that local officials in those cities did not have all the clauses in the derivatives deals fully explained to them.

Italy's economy ministry estimates the total amount of derivatives products sold to local governments in Italy at 35.5 billion euros.

© 2011 AFP

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