The net notional amount of credit default swap contracts covering Italian debt has been declining since November, so the widening spreads should come as no surprise, says Reuters fixed income analyst Vincenzo Albano.

“Ultimately, despite intense debate on CDS and on their regulation, only a minimal part of debt has credit protection in place,” Albano says. “In the euro zone, as a whole, only 1.4% of public debt is protected against default.”

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