LONDON, Aug 9 (Reuters) - The cost of insuring exposure to Italian sovereign debt and the country’s banks rose sharply on Friday after the leader of Italy’s ruling League party, Deputy Prime Minister Matteo Salvini, declared the governing coalition to be unworkable.
Italy’s sovereign five-year credit default swaps (CDS) jumped 19 basis points (bps) from Thursday’s close to 209 bps, the highest level in seven weeks, according to data from HIS Markit.
Italian banks painted a similar picture with CDS trading of the country’s largest bank by assets UniCredit adding 7 bps to 119 bps, while Intesa Sanpaolo’s jumped 13 bps to 128 bps. Both CDS rise to their highest since late June, according to HIS Markit. (Reporting by Karin Strohecker Editing by Tommy Wilkes)