Italian magistrates investigating losses at Banca Monte dei Paschi say the mushrooming scandal has taken a dramatic turn, with political fallout that threatens to rock the country’s elections next month and upset eurozone plans for a banking union. “The situation is explosive,” said Tito Salerno, head of the prosecuting team in Siena, describing the fast-moving events at Italy’s third-largest bank as extremely grave. The Milan bourse tumbled 3.4pc and yields on 10-year Italian bonds spiked 15 basis points to 4.31pc as the political scandal widened. Monte dei Paschi (MPS), the world’s oldest bank dating back to 1472, is under investigation...