Monday, November 28, 2016
Italian Bank Shares Dive on Fears About Potential Referendum Defeat
The FTSE Italia All-Share Banks Sector Index IT8300 is down 4.16% today.
Italian voters next Sunday will be asked in a referendum to approve changes to the country’s constitution.
The large scale proposed reforms would cut the Senate’s size by two-thirds and reduce powers held by the country’s 20 regional governments. Italian Prime Minister Matteo Renzi is promoting the referendum.
Critics of the proposals say they “put democracy at risk in Italy as so much power will be concentrated in the hands of few people—not necessarily representing the majority of the voters,” Citibank said in a note last week.
In other words, the referendum is an elitist proposal to maintain slipping control. If the referendum fails, it could mean the end for government support of Italian banks.
Recent polls show growing opposition to the proposed reforms.
at 11:55:00 AM