Italy’s Bonds Are Messing With Risk Models

  • Outsized moves challenge bank, investment firm risk measures
  • Italy yield jump, emerging-market currency swings stand out

Rare market gyrations keep cropping up, presenting a challenge to the risk models at financial institutions.

From Italian debt to emerging-market currencies, extreme market moves are taking hold, raising the prospect of forced selling as portfolios adjust to maintain a steady level of risk.

Dani Burger | Bloomberg

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