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Mini-BOTs, the Monster Under the Bed for European Investors

  • Issuance would amount to a parallel currency, analysts say
  • Move may fuel concerns about Italian fiscal sustainability

They may be called mini-BOTs, but they are no small matter for European investors.

The proposal of the Five Star and League parties to assess the feasibility of paying state arrears with short-dated notes of small denominations has sent risk premiums on Italian assets soaring. Analysts fear an issuance of mini-BOTs would, among other things, constitute the issuance of a parallel currency.