The bulk of Italian RMBS could withstand a further sharp deterioration in the economy, Fitch Ratings said in a release today.

The agency said that roughly 80% of triple-A-rated tranches would be able to pay in full even under "a three-year severe recession and collapse of the real estate market." Fitch puts the notes through a ringer of a stress test, including scenarios of 17% unemployment - double the current figure - and a 70% plunge in the prices of foreclosed properties.

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