The word spread indicates a difference or gap. In the case of government bonds, the spread indicates the gap between the yields of Italian and German government bonds, which are considered more reliable. The higher the spread, the higher the cost for the bond issuer, that is the State, to refinance its debt. High spreads could lead in the medium to long term to sovereign default or to drastic cuts in public spending and/or an increase in taxes to avoid bankruptcy.
Gruppo Banca IFIS
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