UNIVERSITY OF MALTA LINK CAMPUSM ASTER IN B USINESS A
DMINISTRATION
FINAL DISSERTATION
ANALISYS OF THE EUROPEAN ENERGY MARKETS AND COMPARISON WITH THE
COMMODITIES SWAP MARKETS
Supervisor: Prof. Silvia Pulino
by: Paolo Lombardi
March 10th, 2012
MBA 11 Link Campus Business School
AUTHENTICITY PLEDGEI swear that this paper for Link Campus
Business School is, in whole and in part, my own and is not copied
from any other student or source
ABSTRACTSince 1962 the Italian Government established that the
all the phase related to the electrical die in Italy was to be
managed from the ENEL, Ente Nazionale per lenergia ELettrica, a
governmental organization designed in order to carry out the
production, the distribution and the selling of the electrical
energy. The private energy production was allowed only for
self-consumption of the total amount produced. Only in the 1991 the
Italian government liberalized the energy production and
distribution under certain conditions (from renewable sources as
example), giving to third parties the right to produce electrical
energy to be used by other companies in the same group, the same
consortium or to be sold to ENEL. This signed the birth of the
energy market regulated by an ad-hoc constituted authority, the
Regulatory Authority for Electricity and Gas (1995) at the same way
which lead the other European countries to give birth to their own
energy markets and supervising authorities. The energy financial
market derived, entrusted to GME (Gestore Mercato dell Energia,
2004) in Italy, is still young and its regulation and
diversification is still in development. Chronologically similar to
this trade development is the business of Swaps based on
commodities, and the oil based swaps as their representative. In
the 1990s, the over-the-counter derivatives marketplace started to
grow significantly. Swaps started to become more standardized,
though we still lived in a world where the vast majority of these
transactions happened over telephones, on a bilateral basis and had
many components of individual negotiation, particularly on credit
terms. This analysis, starting from an investigation of the
structure of the markets we have previously mentioned and theirs
regulation, aims to summarize the most relevant financial
characteristics of the markets and to carry out a comparison in
terms of financial markets and related regulation, indentifying
what swap market is closer to the energy market.
