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The Tango Bond and the treasury in Switzerland. The Clinton-boy accuses Argentina
Corriere Della Sera
January 15, 2010

Massimo Sideri
msideri@corriere.it

MILAN By itself, the strategy is nothing unusual; take advantage of the Swiss money, even from a special bank like BIS, Bank for International Settlements, in order secure a "small treasure" of 50 billion dollars. Only in this case the client is a State, which, in 2001, declared an international bankruptcy and which still has old bonds outstanding in default for an amount of 20 billion: The Republic of Argentina. And this is the key argument to be used by Robert J. Shapiro, former under secretary of commerce of the Clinton administration and consultant to Blair and Obama, to tell the Italians not to accept the reopening of the exchange ratio of 2005 with which Cristina Kirchner, president of Argentina, would like to definitively close the accounts of that period, putting an end to the work started by her husband (and ex-president) Nestor. The super consultant, now head of ATFA, American Task Force Argentina, whose members are 30 major U.S. institutions plus hundreds of small investors, will arrive in Milan next week as part of a European tour to create an anti-exchange ratio axis.

Waiting for him to hear what he has to say there will probably be Nicola Stock, president of the Italian Task Force under the auspices of ABI. Stock's TFA has always been against the Argentine offer, so much so that he tried to discourage Italian Tango-bondholders from accepting it as early as 2005. The effects of the people who say no in Italy is very strong: while being one of the countries that was deeply mired in the bankruptcy, about two-thirds of investors, equal to 300 thousand bondholders, had preferred to keep the junk bonds rather than accept cutting 70% of the nominal value of their investment.

But now Shapiro's position is different. After thorough investigations, ATFA noted that Argentina went from 10.375 billion in reserves with BIS in 2002, i.e. after the default, to over 49.645 billion in December 2009. The then President of the Central Bank of the Argentine Republic in 2002, Alfonso Prat Gay, had spoken of a deliberate strategy to secure the money against the demands of the creditors scattered across the world from the U.S. to Japan. Still, it is a legitimate practice spread across all countries. Although Shapiro does not fail to stress the Argentinean anomaly which sees a share of 80% of the reserves of the Central Bank in Buenos Aires concentrated within the BIS.

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