What Is The Italian "Contagion" Trigger? Goldman Answers

Two days ago, when looking at the ongoing turmoil gripping the Italian market, where the imminent formation of a populist, Euroskeptic government with a penchant for spending and threatening to impose a "parallel currency", the " Mini-BoT" has sent Italian yields soaring to the highest level in years, we noted something more troubling not just for Italy, but for all of Europe: Italy's redenomination risk was soaring, and was starting to spread to the other key PIIGS: Portugal and Spain (Greece, having recently concluded its 4th bailout will probably not implode soon).