Whether its rating downgrades (which are much more critical than one would imagine given haircuts and collateral shortages), anxiety-inducing elections that could bring tensions in the 'party' that is Europe's political union, or referenda, the next few months have more than their fair share of event risk to navigate. Starting with Italian (and then Spanish banks) next week, it seems the market is starting to sense the squeeze that events could cause.
[3]
Source: Morgan Stanley