Central Banks & Macro risk-off · 6–18 months
A what‑if from the future

What if Monte dei Paschi needs another state rescue?

A fresh MPS capital hole forcing state rescue revives Italian bank-sovereign loop fears — sell Italian financials and widen BTP-Bund, not lead with Solana -1.0% as the cascade does. Rhymes with the 2016-17 MPS bailout saga that pressured Italian banks and BTPs without becoming systemic. Transmission: the Italian state backstops the bank, re-coupling sovereign and bank risk; periphery widens modestly. Forward angle: a single mid-cap bank with EU bail-in rules and ECB supervision is far more ring-fenced than the 2011-12 doom loop, so contagion should stay shallow.

15%
our model probability
over 6–18 months
prediction markets — the market's odds
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Anchored to measured history 15% · 90% range 6–24% · 40 dated precedents behind it — a wider range means thinner evidence

Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.

The butterfly cascade

How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.

Resolution timeline — how this probability is moving

Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…

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What it would mean

If this plays out, it is a risk-off shock. Renewed capital hole at MPS forces state intervention, reviving Italian bank-sovereign doom loop fears. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.

Methodology. Probability and impact are anchored to history and scored against what actually happens — wins and losses, in public, at Reality Check. Market odds live from Polymarket & Kalshi. By Vikas Singh, Quantitative Strategist. Updated 2026-08-13.