Tuesday, December 20, 2005

Pas trop tôt!

I'm feeling giddy: yesterday Antonio Fazio finally resigned!

Antonio Fazio resigned on Monday as governor of the Bank of Italy, finally succumbing to the mounting pressure of a banking scandal that has severely damaged the reputation of the country’s business community.
The governor, under judicial investigation for possible abuse of office and insider trading, quit on the eve of an emergency Italian cabinet meeting to discuss new laws aimed at forcing him out of office.
Two senior members of the Bank’s own board met Mr Fazio on Monday afternoon as internal support for the governor crumbled.
Mr Fazio had resisted calls for his resignation since the summer when court documents highlighted the close relationship which he and his wife had with Gianpiero Fiorani, a banker involved in a controversial takeover battle. The calls reached fever pitch last week after Mr Fiorani was arrested on charges of running a criminal network for personal gain and market abuse related to the takeover battle.

It has taken him so long to leave that it almost feels like some incredible goal has been reached, while the truth is that this is only the first step: what really counts is who will replace him.
According to the Italian press there seem to be five leading candidates:

Former European Central Bank Executive Board member Tommaso Padoa-Schioppa is among the frontrunners to head the Bank of Italy after Antonio Fazio's resignation, economists and politicians said.
Prime Minister Silvio Berlusconi's cabinet today will discuss a proposal to give the government the power to appoint and remove the Bank of Italy governor, a day after the departure of Fazio, 69. The government was powerless to force Fazio out even after he became the target of two criminal investigations into bank takeovers in Italy.
"Padoa-Schioppa would be the perfect candidate," said Lorenzo Codogno, co-head of European economics at Bank of America in London, in an interview. "He knows the Bank of Italy very well and has experience at the ECB. It would be a comeback."
The 65-year-old economist, who served seven years on the ECB's six-member executive board, would garner support from both sides of the political spectrum, economists said. Padoa-Schioppa and Fazio worked side by side as deputy director generals, the No. 3 position at the Bank of Italy, until 1993, when Fazio was chosen over Padoa- Schioppa as governor.
Other names mentioned this week by Italian newspapers such as Corriere della Sera and among economists are Mario Draghi, former director general of the finance ministry and now a vice chairman at Goldman Sachs Group Inc.; Vittorio Grilli, the current director general of the ministry; former European Union Competition Commissioner Mario Monti and Lorenzo Bini Smaghi, who took over Padoa-Schioppa's seat on the ECB executive board in June.

They all sound pretty good, and their mandates will probably be limited to five years, which is great. It even seems they intend to reform the governing council of the central bank which could use some transparency. And Fazio might even follow in Fiorani's footsteps an end up in jail.

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