Police seize bank assets

Bloomberg

The police froze the banks’ stakes in Italian companies, real estate assets and current accounts, the financial police said in an e-mailed statement yesterday. The assets seized on Monday also include those of a former local government official and a consultant, the financial police said.

The City of Milan is suing the four banks after it lost money on derivatives it bought from the lenders in 2005. The securities swapped a fixed rate of interest on 1.7 billion euros of bonds for a variable rate, and enabled the city to repay the bonds in yearly installments. Milan was losing 298 million euros on the derivatives as of June 30, according to a July report commissioned by the city.