Scenario description
Assume France’s sovereign-bond market stress remains materially elevated after the Sept. 30 selloff. By the resolution date, the 10-year France-Germany government-bond spread has not retraced below 120 basis points for a sustained period, or a major sovereign-rating agency has taken an additional negative action on France’s long-term sovereign rating or outlook. The geography is France within eurozone sovereign-bond markets. The known reported starting point is the MarketBrief account of the spread reaching 124 basis points on Sept. 30, French 10-year borrowing costs reaching their highest levels since 2002, and French debt yielding 22 basis points more than Italian debt; the precise future funding volumes, coupon rates, and policy response remain unspecified.