Italy's scandal-tainted top banker resigns
The resignation of Italy’s embattled central bank chief has cleared the way for the government to focus on reforming the nation’s scandal-tainted banking industry at a special cabinet meeting today.
Antonio Fazio, under criminal investigation for alleged abuse of power, submitted his resignation yesterday as the Bank of Italy’s governor. For months, Fazio had resisted calls to step down.
Today, the bank’s superior council was expected to formally accept the resignation, which pre-empted a flurry of government efforts to remove him to end an international embarrassment.
The bank’s number-two official, Director General Vincenzo Desario, was expected to temporarily replace Fazio.
The Bank of Italy said Fazio was stepping down “with a clear conscience” and in the “greater interests” of Italy and the central bank.
Following Fazio’s resignation, “the objective is to quickly pass a proposed banking law in the chamber of deputies to allow the senate to do the same … before Christmas”, Elio Vito, the chamber whip for Premier Silvio Berlusconi’s Forza Italia party, was quoted as saying by the Italian news agency, Apcom.
Fazio, as central bank governor, had vast surveillance and antitrust powers in the banking sector and was appointed for life.
Opposition leaders and consumer lobbies have been pressing for the antitrust powers to be taken away from the Bank of Italy and given to a separate authority.
Whatever shape the reform takes, it is expected to set a brief term for future Bank of Italy governors and would allow the government to revoke the mandate.
One proposal would have the governor nominated by the government, instead of the present arrangement: internal Bank of Italy nomination approved by Italy’s head of state.
Names mentioned in Italian media as top contenders have included Mario Monti, the former EU competition commissioner who was named last week by Goldman Sachs International as an international adviser.
Also cited were Mario Draghi, a former top treasury ministry official; Tommaso Padoa-Schioppa, whose term as a European central banker ended earlier this year and Vittorio Grilli, the treasury ministry’s director general and Desario.
Before the resignation, today’s cabinet session faced the sticky task of devising a way to ease Fazio out of the post he has held since 1993.
Fazio has been under investigation for allegedly abusing his position in dealings involving Banca Popolare Italiana Scarl’s takeover war with Dutch bank ABN Amro Holding NV for Antonveneta.
Milan prosecutors are also reportedly investigating Fazio for insider trading in connection with the same bid.
He has repeatedly denied wrongdoing.
Berlusconi said he was withholding judgment on Fazio, whom he praised as an “honest and responsible person”.
The conservative premier, in other remarks on a talk show late last night, defended Italy’s banking industry as ”sound”.
“If there are rotten apples, they rise to the surface,” Berlusconi said, citing Parmalat.
The Italian dairy company was rocked by a massive fraud scandal two years ago that saw many small investors lose fortunes after subscribing to bond offers through Italian and international banks.
Bankers jailed in the takeover probe have been grilled by Milan prosecutors.
Former PPI Chief Executive Gianpiero Fiorani, who was arrested last week on a warrant for market rigging, has reportedly told prosecutors about his cozy relationship with Fazio and allegedly claimed he enjoyed the favour of the central bank.
The European Central Bank said Fazio’s resignation served the best interests of Italy and of the Bank of Italy.
