Abstract

The contracts in financial derivative instruments, concluded by Municipalities, Provinces and Regions (between 2001 and 2008), have produced mostly negative results for the local finance and opened a long and difficult dispute between local authorities and banking institutions. The article tries to trace the causes of this problematic situation, by analysing the shortcomings of the regulatory framework, the issues emerging in practice and in the case law. The study is an opportunity for more general reflections on the limits of contractual freedom of local authorities, within the framework of the principles of local government finance.