New Bank of Italy governor formally takes over
ROME – New Bank of Italy Governor Mario Draghi formally took over his new job Monday, hoping to restore confidence after a takeover scandal tarnished the central bank’s reputation.Draghi, a respected economist, was appointed by Premier Silvio Berlusconi’s government last month after the scandal forced the previous governor, Antonio Fazio, to resign.”After all that happened at the Bank of Italy over the past months, one must hope Mario Draghi will be a turning point,” said Giorgio La Malfa, minister for EU affairs, according to the Apcom news agency. “Draghi has all the qualities necessary to head the Bank of Italy authoritatively in the next years.”Corrado Passera, chief executive of Banca Intesa, said he expects the new governor to be a “key factor” in the improvement of Italy’s banking system.Analysts expect Draghi to be less hostile than his predecessor to foreign banks’ attempts to enter the country’s banking system. Fazio was accused of improperly favoring Italian banks over their foreign competitors in takeover battles, and is under investigation for abuse of power and insider trading.One of the first issues awaiting Draghi concerns one of the takeover bids at the center of the scandal, that by Italian insurance company Unipol Assicurazioni SpA for Banca Nazionale del Lavoro SpA.The Bank of Italy rejected the bid earlier this month, saying that the insurer did not meet its equity requirements for the takeover. Unipol is expected to present an appeal by Friday, and the Bank of Italy has then two weeks to issue its conclusions.Spain’s Banco Bilbao Vizcaya Argentaria SA dropped its own takeover bid for BNL in July after Unipol entered the bidding. Analysts said the Bank of Italy’s rejection of Unipol’s bid might prompt BBVA to make a second offer to buy Rome-based BNL. The Spanish bank holds a 14.8 percent stake in BNL.Draghi, a former managing director at Goldman Sachs, comes with solid credentials. As director general of the Italian Treasury from 1991-2001, he was in charge of privatizations.Draghi, 58, is the first central banker to be named with a six-year term.He was chosen under new rules for the central bank pushed through by the government after Fazio’s resignation. The reform reduces the governor’s open-ended mandate to a six-year, once-renewable term, and transfers some of the central bank’s regulatory powers to Italy’s competition authority. It also transfers the power of appointment to the government from the Bank of Italy’s high council, or board of directors.Draghi is also expected to name a new director general to replace Vincenzo Desario, who wants to resign, according to Italian newspaper La Repubblica. Desario had been serving as acting governor between Fazio’s resignation and Draghi’s appointment.