Spread in real time: what it is and how it affects funding

The real-time spread is a service offered by many websites, where you can monitor the progress of this important measure of the cost of state financing . To be able to make the best use of these tools, it is however necessary to understand how the spread works, since it has become a concept widely used in public debate, sometimes with many inaccuracies. The spread, depending on convenience, is used to scare consumers or, on the contrary, reduces its importance, stating that it only concerns the financial markets. Let us try to make this concept clearer.

Spread means the difference in the interest rate between a financial security and another , considered particularly reliable

interest rate

In the case of the spread that we often hear about, it indicates the difference in the rate of the Italian BTP , a 10-year government bond, and another state security deemed safe, called the benchmark : the spread, in most of the cases, refers to the German Bund , ie the 10-year government bond of Germany. The difference between the Bund and BTP therefore constitutes the spread: how to read this data? If, for example, the spread is at 200, it means that the difference between the rates of the two securities is 2%.

The Bund is chosen because it is considered a particularly stable and secure security


When the spread goes up a lot, above 250 points for example, it means that the Italian state is paying a lot more to finance its activities and repay its debts. These seem very distant concepts from the daily life of citizens, but in reality when the State has to pay its debt a lot, it can allocate much less resources to essential functions such as welfare . Thus, a high spread is not good news even for ordinary citizens.

However, it is good to consider this measure with caution, which can also depend on turbulence on financial markets that have little to do with the actual performance of the Italian economy. In general, even if there is no precise rule, one can say that the markets and the spread punish instability , that is when we see the risk that the State is in difficulty to respect its economic and financial commitments. Finally, we must not forget that the spread, together with some reference rates, helps to establish the cost of variable rate mortgages.

However, to stay informed about these dynamics, you can connect to an online tool like the one prepared by Il Sole 24 Ore, to keep you informed about the spread in real time. The online tool allows first of all to display the current value of the spread , or rather the one at the last update, which is now reported on the same page. Furthermore, the percentage change compared to the previous update is also available. Finally, it is also possible to study the trend of this index during the day which, thanks also to an easy to understand graph, also indicates the maximum and minimum values ​​touched in that period of time.