Finanical turmoil as political uncertainty continues in Italy

The governor of the Bank of Italy has warned the country is 'only ever a few short steps' from losing investors’ trust as markets dumped stocks and bonds, fearing repeat elections will become a de facto referendum on the country’s euro membership.

Caretaker Prime Minister Carlo Cottarelli, a former IMF, was expected to present a team of ministers to Italian President Sergio Mattarella on Tuesday but no cabinet has been announced. Markets have rallied slightly but the political uncertainty continues.