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Italian Ordinary Statute Regions and Derivatives

Author

Listed:
  • Giulia Fantini
  • Chiara Oldani

Abstract

Regions are first-level local administrations in Italy. Since 2003, regions have extensively used over-the-counter (OTC) derivatives. Since the use of these derivatives is not clearly regulated, derivatives have been employed to hedge outstanding debt and its costs, but there is evidence that derivatives have also been used to pay current expenses. This study empirically investigates the dynamics the debt of Italian Ordinary Statute Regions and the impact of OTC derivatives during the 2007-2012 period, and the results show that derivatives – as measured by negative market value – have a positive and statistically significant relationship with debt.

Suggested Citation

  • Giulia Fantini & Chiara Oldani, 2015. "Italian Ordinary Statute Regions and Derivatives," CAMA Working Papers 2015-43, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2015-43
    as

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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2015-11/43_2015_fantini_oldani.pdf
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    References listed on IDEAS

    as
    1. Granof, Michael H., 1984. "A fundamental flaw of debt limitations for state and local governments," Journal of Accounting and Public Policy, Elsevier, vol. 3(4), pages 293-310.
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    More about this item

    Keywords

    Derivatives; Italian Regions; Local Public Debt; Financial Management;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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