Siena

Inspectors check Siena's accounts amid MPS turmoil

Municipal inspection linked to scandal at Siena-based lender

Inspectors check Siena's accounts amid MPS turmoil

Siena, February 6 - A financial inspector from Rome was expected to spend several days examining the 2011 budget of the City of Siena, sources said Wednesday. It's not clear what agency the inspector represents but it's thought to relate to the unfolding scandal at Monte dei Paschi di Siena (MPS), Italy's third-largest bank. Bank board members meeting Wednesday were scheduled to update shareholders on total losses at the world's oldest bank, stemming from a series of high-risk and failed derivatives trades and other structured financial deals. The extent of those losses had previously been hidden from investors and were recently estimated at about 720 million euros. However, Italian business daily Il Sole 24 Ore reported the bank would reveal losses of 920 million euros from the three derivative trades, plus a further loss of 120 million in "personnel costs". The bank has denied that report. The news comes on the same day that former chief executive Antonio Vigni entered a Siena prosecutor's office for questioning into alleged fraud at the troubled bank. There have also been reports of bribery and corruption by bank officials regarding, among other things, the costly nine-billion-euro acquisition of rival Antonveneta in 2008. The scandal comes amidst a national election campaign and could damage the prospects for the left-leaning Democratic Party, which has longstanding ties to MPS and its lucrative foundation. But politicians across party lines all have some connection to the bank, which have requested and received government assistance in recent years.

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