Italian political risk scenarios: We assign a subjective 70% probability that another round of elections can be avoided in Italy, but only a 10% probability that such a government will be strong and stable. We assign a 30% probability to our bear case that no viable government can be formed, and new elections are needed. We caution that the situation remains fluid.
The Italian index, the FTSE MIB, has lost approximately 5.2 per cent of its value in the past month as election uncertainty has worried investors.
(Source: Yahoo! Finance)