Independent Strategy

Moving on from Monte dei Paschi

The “precautionary recapitalisation” of Monte dei Paschi should remove the Italian banking sector’s problems from the front pages for the next few months. But the underlying problems will take time to resolve and are likely to require further capital. Political risks meanwhile remain acute. The government will find out if the electoral law it did manage to get through (the Italicum) is constitutionally valid. And ahead of that, the court will rule on whether Renzi’s flagship Jobs Act will be subject to its own referendum. We remain short BTPs.

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