Mark Gilbert , Columnist

Italy Scalds Bond Investors in Replay of Greece

Traders have seen this movie before, and it doesn't end well.

September 28, 2018 at 8:43 AM UTC

Mark Gilbert is a Bloomberg Opinion columnist covering asset management. A former London bureau chief for Bloomberg News, he is author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”

Dusk in Rome.
Photographer: Chris Ratcliffe/Bloomberg

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A populist euro zone government plays fast and loose with its budget in defiance of the strictures of Brussels, prompting a surge in bond yields. Investors have seen this movie play out in Greece in recent years; now, it’s being re-screened in Italy.

While the cast has changed, the script and the likely ending remain the same: Higher deficits, weaker creditworthiness, and a bruising for lenders that try to ride out the turmoil.