Italian banks have led the downturn in Europe

Italian banks have led the fall of European financial companies downwards as a result of growing fears of new elections in the country that could boost the position of major populist parties in the country.
The decline was driven by the shares of Banca Monte dei Paschi di Siena SpA, the volatile government-backed bank whose shares lost 7.8% of its value.
Seven of the eight worst-performing stocks in the Bloomberg Europe Banks Index were at European banks. The shares of the largest Italian bank - UniCredit SpA, lost nearly 5% of its value.
Meanwhile, the decline in Italian banking stocks has triggered the deletion of the growth of FTSE MIB Italian index since the beginning of the year.
New political choices, coupled with growing consensus opinions among populists, seriously frighten investors, according Gabriela Pinosa, head of Go-spa Consulting, a Milan-based consulting company quoted by Bloombaerg.
The victory of Euro-skeptics may lead to a gradual withdrawal of Italy from the eurozone and a potential debt write-off. And this can be extremely negative for the euro.
Interest rates on 10-year Italian bonds rose yesterday to over 2.6%, which was their highest level in nearly four years.
The fall in Italian bond prices has occurred after populist leader Mateo Salvini said it does not make much sense for Italy to remain within the EU unless the Union rewrote its rules.
The political situation seems extremely unfavorable for Italian bonds and debt holders because of the future unpredictability of vague Italian leaders.