Italy's government promised on Tuesday the swift passage of a reform of the central bank, part of a long-awaited broader bill to shore up financial regulation and protect the country's small savers. Pressure to approve the bill, originally drawn up following the exposure of a massive fraud scandal at Parmalat two years ago, has mounted amid a widening banking scandal that forced the resignation of central bank governor Antonio Fazio on Monday.
Economy Minister said the government would likely put the regulatory reform and the central bank changes to a confidence vote in parliament in order to push them through by the end of the week. Tremonti said the Bank of Italy reform fixes a six-year mandate for the governor, renewable once, and changes the way the central bank chief is nominated. He said the names of future governors would be put forward by the government after consulting with the Bank's High Council, for approval by the president. Until now the High Council has proposed candidates.
Tremonti said the reform also provides for the sharing of some of the Bank of Italy's antitrust powers with the Italian competition regulator, in line with a request from the European Commission. But center-left leader Romano Prodi said the effort to rush through the reforms should have come much earlier.
"I think it's arriving very late, we've been asking for it for months," Prodi told The Associated Press. "But we could not have the reform on savings because the governing coalition did not agree on it," he said, referring to bickering that has had the regulatory reform languishing in parliament. Prodi called for the quick replacement of Fazio following a scandal that sees the former bank chief under investigation for abuse of power and reportedly for insider trading over his handling of takeover battles for Italian banks.
"It's necessary to restore the credibility of a great country like Italy and therefore time is a strategic factor," Prodi said. Fazio has been accused of discriminating against foreign banks, including Dutch lender ABN Amro Holding NV during its effort to take control of Italy's Banca Antonveneta SpA, reports the AP. N.U.