Fears spread that Italy may seek international bailout after borrowing costs of the world's No. 8 economy soared to a dangerous level Wednesday.
According to the Korea Center for International Finance (KCIF), the yield on the Italy's 10-year government bonds soared 49 basis points (bps) to a euro-era record of 7.21 percent, breaching the dangerous threshold of 7 percent at which Greece, Ireland and Portugal sought bailout funds.
The three peripheral nations were all forced to ask for bailout funds after their borrowing costs reached similar levels. Greece sought international bailout just 17 days after its borrowing costs breached the 7 percent level, while Ireland and Portugal took 22 days and 91 days each in seeking bailouts after their yields breached that level.
"It is imperative for Italy to seek international bailout. Greece, Ireland and Portugal asked for financial aid within three months after their borrowing costs breached the 7 percent level," Kang Hyun-gie, a strategist at Solomon Investment & Securities in Seoul, told Xinhua.
Kang, however, noted that the Italian event would unlikely cause a Greek-typed turmoil in the global financial market as the euro region's third-largest economy could avert the crisis through its own capacity such as strong manufacturing sector and international trade.