Suspects in bank scandal hindered and questioned in Milan

Prosecutors on Saturday questioned key suspects in an Italian bank scandal, news reports said, while pressure mounted on Italy's central bank governor to resign. State radio reported that Bank of Italy governor Antonio Fazio was being investigated for suspected insider trading because of a phone conversation he had last summer about a bank takeover bid with the executive, at that time, of one of the banks involved.

That banking official, Gianfranco Fiorani, was transferred from Milan's San Vittore prison to the seventh floor of a Milan courthouse for questioning by Magistrate Clementina Forleo, state TV and the Italian news agency ANSA reported from that city. Paramilitary police barred journalists from the floor where the questioning was being conducted. The office of Fiorani's lawyer said no one was immediately available for comment on the reports.

Fiorani was arrested on Tuesday on charges of market rigging. He had resigned earlier this year as chief executive of Banca Popolare Italiana during the probe of Popolare's failed takeover bid for Banca Antonveneta SpA. Fiorani was considered a close friend of Fazio. In a statement Friday from the central bank, Fazio insisted he has always acted in respect for the law. Another former Popolare official, Gianfranco Boni, was questioned for two hours Saturday at the courthouse, TG5 news on a private Italian TV channel reported from Milan. State radio and other Italian news reports said Saturday that Premier Silvio Berlusconi's government will hold a special Cabinet meeting Tuesday to try to devise a plan to end the tenure of Fazio, who was appointed to a life term in office in 1993. The plan will reportedly be part of legislature to overhaul Italy's clubby banking industry.

But Welfare Minister Roberto Maroni, whose Northern League party has been a big backer of Fazio, dismissed the idea that the bank chief could be removed from office. "The government cannot fire the governor. Bank of Italy has its autonomy," ANSA quoted Maroni as saying. On Friday, Economy Minister Giulio Tremonti called for Fazio's ouster, contending that the bank chief's insistence on hanging on to his post was "costing too much for citizens and for the country", reports the AP. N.U.