(Adds details from sources, background)
MILAN, April 19 The Bundesbank has rejected a
request by Italian prosecutors to freeze assets belonging to
Japanese bank Nomura and held in Germany, sources with
direct knowledge of the matter said on Friday.
The prosecutors this week issued an order to seize up to
1.95 billion euros ($2.55 billion) from Nomura in accounts
outside Italy following allegations that it colluded with former
managers of Monte dei Paschi, the world's oldest bank,
to set up huge hidden bets on Italian government bonds that have
since helped drive the Italian bank close to collapse.
Nomura says it has done nothing wrong and would take all
appropriate measures to protect its position.
The Siena prosecutors' first move was to try to block a
Nomura account held with Citigroup in Frankfurt through
"Target 2", the European interbank payment system.
The Bank of Italy contacted the Bundesbank over the
prosecutors' request but the German central bank declined to do
anything, two sources with knowledge of the situation told
"The Bundesbank says that they cannot act through the
channels indicated by Italian magistrates," one of the sources
A second source said the Bundesbank had not formally refused
to cooperate with the Italian magistrates but that under German
law it cannot enforce any such seizure request without a ruling
by a German court.
Prosecutors in Siena would therefore have to make a formal
request to the German authorities.
A spokesman for the German central bank said, "Any
enforcement measures relating to the assets of a customer occur
solely within the framework of a legally regulated procedure."
The seizure order was aimed at preventing Monte dei Paschi
from sending more cash to Nomura as collateral for the
"Alexandria" financial derivatives trade, a huge bet on Italian
government debt that went wrong. Prosecutors say their move has
frozen all payments related to the Alexandria trade.
The seizure warrant, seen by Reuters, says the magistrates
are also seeking to freeze funds held on behalf of Nomura in
London accounts with Citigroup and Bank of America
. However, a source close to the probe said that no
request has been made to the Bank of England.
Even before the prosecutors' seizure request Nomura had
begun proceedings in Britain to try to establish British
jurisdiction in its dispute with Monte dei Paschi over the
Monte dei Paschi has posted losses of 730 million euros from
derivatives deals including Nomura's Alexandria and a similarly
large trade called Santorini which was done with Deutsche Bank
A judicial source told Reuters this week that the
investigation into the Santorini deal was not yet as advanced as
the probe into Alexandria.
Flavio Valeri, the head of Deutsche Bank in Italy, told
Reuters on Thursday that the German bank had not been informed
of any possible proceedings against it by the Siena magistrates.
(Reporting By Silvia Ognibene and Stefano Bernabei; Writing by
Silvia Aloisi; Editing by Greg Mahlich)