10/31/2008

Bond investors are starting to wonder whether the Italian government will be able to roll over €198 billion of sovereign debt next year as a cluster of debt issues matures. The interest spread between Italian 10-year bonds and German Bunds has hit 108 basis points, the highest since Italy abandoned the lira in favour of the euro. Simon Derrick, currency chief at the Bank of New York Mellon, said outflows from Italian bonds "have been relentless over the last year". Meanwhile, Libya expressed interest in investing in several large Italian companies.

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