The Italian Senate approved a seven-year limit for future central bank governors on Thursday amid calls for current Bank of Italy Governor Antonio Fazio, who holds a lifetime appointment, to resign.
Besides the introduction of a fixed term, the measure provides for the transfer of the bank from private to public ownership, and dilutes the governor's power by handing more decision-making power to the bank's senior directors. The changes were part of an overall reform of the central bank, which has been tacked on to broader legislation aimed at protecting small Italian investors.
The lower Chamber of Deputies must now approve the bank reforms, which will only apply to Fazio's successors.
Senate legislators defeated an amendment from a lawmaker in Premier Silvio Berlusconi's Forza Italia party to strip the central bank of its power to rule on antitrust issues for mergers and acquisitions in the banking sector.
The reforms came after months of controversy over the Bank of Italy's handling of bank takeover bids, centering on the struggle between Dutch bank ABN Amro Holding NV and Banca Popolare Italiana Scarl for Banca Antonveneta SpA.
Fazio has been accused of favoring Banca Italiana Popolare over its foreign rival. The central bank governor, who is being investigated by Rome prosecutors, has insisted that he acted correctly and has ignored widespread calls for his resignation. AM