October 1, 2007 (LPAC)--Instead of putting up a firewall to protect banks and investors from the sinking hedge fund ship, technocrats running the Euro-system financial markets are opening the gates for more hedge fund looting, by allowing them to operate directly on MTS, the European platform for state bonds trading. So far, hedge funds could operate on MTS only through banks, which required a minimal regulation and recording.

Handelsblatt reports that some banks expressed concern about the development, insisting that "trade on MTS must ensure the same standards for both banks and non-banks." Through MTS, hedge-funds and brokers could also influence trading on local (national) platforms.

The Eurobonds market is about 4 billion euros, 80% of which is done through MTS. Founders of MTS was a group of "whiz-kids" around Alberto Giovannini, a former manager of Long Term Capital Management (LTCM), which collapsed in 1998, and an executive for Robert Mundell's group of architects and implementers of the European single currency. Giovannini is still an adviser to the EU, through his permanent "Giovannini Group." Eventually MTS, which was created to trade Italian state bonds, representing a majority of EU state bonds, became Euro-MTS and, after the London Stock Exchange takeover of Borsa Italiana, is now directly a City of London-operated market.

MTS has already been used for politically-motivated financial warfare. On August 2, 2004, German state bonds were collapsed by an attack led by Citigroup through MTS. MTS authorities, at that time, claimed that they were caught by surprise. Handelsblatt writes today, "MTS came under the spotlight three years ago, as Citigroup traders used its weak points for market manipulation. With the opening to hedge-funds, the danger is increased that new allegations will be raised."