MercoPress. South Atlantic News Agency

Four banks accused of selling “toxic derivatives” to the city of Milan

The list includes banks from Germany, US and Switzerland

Four major banks have been ordered to stand trial in Italy in a fraud case related to derivatives trading. JP Morgan Chase, UBS, Deutsche Bank and Germany's Depfa bank have been told they will be tried for aggravated fraud, along with 13 other people. The charges relate to the sale of derivates to the city of Milan.

JP Morgan denied employees involved had acted inappropriately, while Deutsche and UBS also denied any wrongdoing. Depfa was not available for comment.

Prosecutors say the trial, which is due to begin in May, is an important test case for hundreds of Italian cities who have lost money through similar deals.

The arrangements between banks and cities, including Milan, were designed to reduce interest payments on their loans.

In the case of Milan, the four banks are accused of misleading the city authorities when they agreed a derivatives deal on a 1.68 billion Euro loan in 2005.

The deal adjusted the interest payments on the loan - a move which Milan says leaves it facing a 100 million Euro loss. Two former Milan city officials have also been ordered to stand trial, along with 11 bank employees.