Zettelmeyer: Trump May Regret Wanting Weaker Europe

The video discusses the political landscape in Germany, focusing on Martin Schultz as a challenger to Angela Merkel and his potential impact on stability. It also examines US-Europe relations under Donald Trump, suggesting he may prefer a weaker Europe. The discussion shifts to central bank policies, particularly the balance sheets and tapering strategies of the ECB and the Fed. Finally, it addresses the impact of political risk on financial markets, noting that despite increased political uncertainty, market indicators do not fully reflect this risk.

How does the perception of political risk affect financial markets according to the text?

What role do you think the Italian banking system plays in the context of political risk in Europe?