Economics: While the focus is still on Deutsche Bank, don't forget about Italy
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Over the past two weeks the primary focus by the world's financial caretakers has been on Deutsche Bank, and its potential to collapse several other institutions through the counter-party risk of its $40-70 trillion derivatives book. But as the markets have appeared since last Friday to shrug off the German bank's imminent insolvency problems, little has been mentioned about the other economy in Europe that has an even greater risk of bringing about the next 'Lehman Moment'.
Over the next month, Italy is expected to vote on a referendum which if passed, would allow Matteo Renzi to institute new reforms that have kept the Italian economy both in stagnation, and austerity since the 2008 financial crisis. But with several of their major banks teetering on collapse in equal or greater measure to that of Deutsche Bank, the potential of an Italian banking implosion not only threatens the Western banking system, but also the future of the European Union itself.