Potential Risks Weigh on Italy Should Sunday's Referendum Fail
With the outcome of Italy's referendum on political reform too close to call, it's difficult for the markets to price in risk.
If the Italian government loses it's referendum campaign and the Prime Minister steps down from office immediately, a potential power vacuum could create problems, says Dr. Chris Hanretty of the Unversity of East Anglia. But Dr. Hanretty believes an alternate government would be put in place quickly, decreasing some risk factors. Italians will vote Sunday on Prime Minister Matteo Renzi's bid for political reforms, and the outcome is too close to call heading into the vote, according to Dr. Hanretty. He says it's difficult for markets to price in risk ahead of the vote.
