GOEBEL It seems to be a reasonably contained systemic risk. The rating agencies are relatively unconcerned because Italy is a structurally rich country and one which has successfully dealt with shaky political situations ever since the end of the Second World War.

There are some known elements in what we are seeing right now, although markets were taken by surprise. The Italian Treasury was receiving 30 basis points only two weeks ago – at the beginning of June – to pick up two-year funds. In an instant, the spread widened to plus-200 basis points briefly until the level came down somewhat.

One can always be surprised that investors are surprised by a known set of facts. In this sense I would not overevaluate the market reaction, which speaks more to short memories than a particularly dire situation in Italy.

DAY This is another example of the impact of liquidity withdrawal leading to panic. This time last year an event like this perhaps would not have caused such upheaval.

After the election we had three or four weeks of calm so investors got confident, but the level of uncertainty increased again. Italy is one of the world’s largest bond markets and it is a big concern for the rest of the world if it is not functioning correctly.

Long term, I agree with Stefan Goebel. Italian political turmoil has been occurring for decades. It is very possible the current government will not last until the end of this year, given the way coalitions work. Besides, any fiscal changes will not be immediate – they will be next year or even the year after.

We are approaching the European summer, which is one reason Italian market volatility has calmed. It is unlikely we will see any political developments until after the summer, so I expect we will see a gradual tightening of spreads during this time. This could change come autumn, though.

EELES It is interesting that during this period the most liquid Italian bonds – government bonds – really suffered, while Italian credit significantly outperformed. To my mind this is the market effectively saying it does not see a knock-on impact for the Italian economy – yet.

The market sees considerable political uncertainty ahead. The Italian government is speaking populist policies, but the reality of what it can deliver is further down the track. It comes back to the point about these kinds of events being a shock to the system in the short term and subsequently being wound out.

GREEN The markets closest to home are pricing more of a premium for the UK than the US or Australian markets – and a premium for the uncertainty is warranted to some degree.

However, if you balance this with the credit fundamentals of the UK banks you could argue there is some mispricing of risk. Compare the level of liquidity and capital held by the UK banks with some of the core European names that price substantially through UK credit in Europe.

Some of this comes down to domestic investors in Europe preferring to buy local names, which is understandable when there is wider market uncertainty and volatility. But I would argue that some of the more developed markets deal with the uncertainty premium better than others. Having said this, it is not having any meaningful effect on our ability to access any market we choose.