OMG, another entity is suing the rapacious bank J.P. Morgan, once the largest American dealer of interest-rate derivatives. Normally this would be cause for wild, unbridled celebration, with lots of Prosecco. However, this time the suing entity happens to be the Italian town of Cassino, which was, like so many of us, profoundly unhappy about repaying a debt with lots of interest.

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A brief word about Cassino: it is, aside from Milan, just about the only really ugly place in all of Italy—and for much the same reason. World War II did a lot of damage to both cities. A massive takeout in Sunday’s Washington Post attempts bravely but absurdly to draw awkward historic parallels between two events: the flattening of poor little Cassino by US forces and their bombs six decades ago, and the more recent flattening of the town’s purse by, as it turns out, Cassino itself when it signed up to buy an interest rate derivatives contract for almost $30 million, thereby switching interest payments on local debt from a fixed rate to a variable one.

Now most people, even those who are not financial whizzes, seem to know and understand that variable rates tend to be … variable. Meaning you can’t count on them. And that a derivatives interest rate swap is, for good reason, comprehensible only to, at most, maybe one person in the bank that’s pushing it. Meaning you can’t count on him either, because he knows something you do not: i.e., a derivatives swap is a license to steal for the one guy who understands what it actually is.

And most people also know that even though you—like the town of Cassino—might be tempted by the idea that you are buying such an obscure and incomprehensible financial vehicle at a time when rates are low (the US dollar-Libor was at 1 percent at the time of purchase), that can and almost certainly will change. Rapidamente. 

In which case you will definitely be, as they say in Cassino, fregato.

But from Italy’s current reaction to the event, which took place around seven years ago, it appears that such eventualities never occurred to the town’s leaders, or indeed to anyone in the entire country. In Milan, J.P. Morgan is not the only bank on trial: so are Deutsche Bank, Depfa Bank, and UBS—all of them, say prosecutors, having tricked the town into buying the contracts. Practically the only bank that had nothing to do with the initial purchase is, ironically, J.P. Morgan itself; Bear Stearns was the actual contract seller, but it was acquired by J.P. Morgan four years ago.

Why would the Italian judicial system try to condemn these banks for doing what banks and bankers are trained to do (i.e., screw the public)—and not, say, put the city leaders on trial for having done the opposite of what they’re supposed to do (i.e., check out the incisors before dancing with a wolf)? Because all of Italy is right now in much the same position as Cassino, which found itself coughing up 2 million euros in the third half-yearly payment.

The 10-year Italian bond yield is now at 7.05 percent, which means the country might be forced (as were Greece and Ireland) to seek external assistance, putting the so-called Union of which it is a major part once again in jeopardy. Cassino has had to cut funding for its day-care center, and almost halved the number of city employees. Italy will have to cut funding for just about everything (except tax-collecting, a hugely unsuccessful novelty in that nation). The country as a whole, in other words, identifies with the homely little town. Flattened by fate. Flattened by Yanks. Flattened by evil Germans.

Come to think of it, maybe there are historical parallels between the economic mess of today and what occurred to Cassino and its abbey during World War II. Was Italy an innocent bystander back then as well?