In an interview with CNBC at the end of May the boss of Unicredit, Federico Ghizzoni, played down fears over Italian government debt and claimed his country's problem was not a huge external debt but a lack of growth.
“I think that the real problem of Italy, where the government, all the time, should focus, is the growth. It is very low. So in the long run, this may generate a problem including a capability to reduce the debt,” said the chief of Italy’s biggest bank.
Now, a mere two months later, Ghizzoni has seen his bank's shares plunge, shedding nearly a quarter of their value since the beginning of July alone as investors bet against Italy’s 1.6 trillion euro debt by shorting Italian stocks.
Banks like Unicredit are the biggest losers.
Unicredit refused to take part in the latest round of capital-raising by its rivals, and while still a major holder of Italian government bonds, it has worked hard over the last decade to diversify away from its domestic market and chase high growth in eastern Europe.
Unfortunately for Ghizzoni, since he took over the banking giant, his country's prime minister has decided to play a difficult hand badly.
In early July Berlusconi was reported to have launched a scathing attack on his finance minister, Giulio Tremonti.
Accusing him of not being a team player Berlusconi was reported to have claimed Tremonti only talks to markets and “thinks he is a genius and thinks everyone else is a cretin.”
Despite a hasty denial of the comments the damage to his government's credibility with markets was gone.
“Italy is a special case,” said Marc Ostwald, a strategist at Monument Securities, in an interview with CNBC on Wednesday.
“This is a crisis started by a reprobate prime minister. He started this by undermining Tremonti (Italy’s economy minister). Berlusconi has to go,” Ostwald said.
Wednesday in Milan, following the release of Unicredit’s second-quarter earnings, Ghizzoni will go in front of a press conference and face a barrage of questions about the strength of his balance sheet and, more importantly, the strength of his country's balance sheet.
It will be a very difficult situation for Ghizzoni, if analysts at Santander are to be believed.
"We no longer believe Italian banks are a play on interest rates, and the factors affecting their performance are now largely beyond their control,” analysts there said in a research note.
The selloff of the last month highlights that view, but on Wednesday Ghizzoni could attempt to shore up confidence amid speculation that he will raise new capital to buttress his core tier 1 ratio.
When CNBC spoke to him in May, he said he would only raise new funds once Basel III rules where clearer.
To act on Wednesday could be seen by many in the market as a panic move from a position of weakness.
Raising money in the current trading environment would also be expensive.
If his only message in front of the Milan press corps after European markets close is that Unicredit and Italy are sound, as we have heard him say before, he could be forgiven for wishing Berlusconi had for once kept his mouth shut and been the "team player" he accused his economy minister of not being in early July.