Sovereign swaps users should learn from Italy’s mistakes
Posting collateral is a cost debt offices must embrace, argues New Sky Capital's Stefania Perrucci
Would Italy have a different book of derivatives if it had always been required to post collateral to its dealer counterparties?
It’s impossible to know, of course, but the question is worth asking because of the situation the country now finds itself in. The derivatives portfolio amassed by the Tesoro – the state treasury – had a notional value of €111.3 billion ($126 billion), with a mark-to-market value of negative €29.8 billion, as of December 31, 2018.
In the post-crisis years, banks have
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