The FTSE Mib has been down nearly 2.50% today, falling over 420 ticks on the back of further uncertainty and arguing among Italian politicians. Berlusconi, as usual, is front and centre but Italian banks have been taking a hit falling down over 2%

Nouriel Roubini remarked in an interview today that a crisis of PM Letta’s government could push the German-Italin bond spread out to 300 bps in just a few days. Recently the spread has narrowed to 246 bps on a better European economic outlook.

Last week Berlusconi’s party threatened to bring down the government if the bunga-bunga man got thrown out of parliament.