BBC News
November 9, 2011
The eurozone faces an existential crisis following alarming increases in the interest rates that Italy would have to pay to borrow.
The cause is a dramatic slump in the price of every category of Italian government bond. It followed a decision by an organisation called LCH.Clearnet, whose business is making sure that bond deals go through, to demand that traders in Italian bonds put up more cash as a deposit against the risk of those transactions turning bad.
The impact has been to make it more expensive to hold Italian bonds, so the price of those bonds has fallen, and the implied interest rate for the Italian government has soared.
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