The use of derivatives contracts by Italian local authorities.

Abstract

In this thesis, we will analyse the use of derivatives contracts by Italian local authorities. Since 1998, local public administrations were allowed, and in some cases obligated, to use derivatives to reduce their cost of debt and manage in a more efficient way their financial resources. In our research, we find out as the absence of a suitable regulation on the matter and the lack of knowledge on the financial market of the public managers laid the basis for a series of misapplications and misleading practices that caused in many cases financial distress in the authorities that used them. In our work, we also analyse the derivatives contracts underwritten by the city of Milan and by the city of Venice.