ING - Reason Will Prevail And European Banks Still Look Reasonable
A melt-down in Italy won't happen. The Italian government will concede. They will have to. If they don't the cost of borrowing will skyrocket, especially in 2019.
Assuming they rein in their spending plans, the cost of borrowing will fall to more reasonable levels. The btp-to-bund yield spread will deflate. Everyone will have a sigh of relief. The next crisis will happen somewhere else.
How can I be so sure? The irresistible logic of the markets - and the fact that come the end of the year papa ECB won't be there to lend a