(ANSA) - Italian Economy Minster Domenico Siniscalco on Wednesday urged parliament to give a rapid green light to a reform of the Bank of Italy and the entire system of protection for investors.
Siniscalco told the Senate there would be grave consequences for the nation's economic and financial credibility unless a clear new set of rules was quickly put in place.
"Without new rules, there is the risk that our capital markets will be progressively sidelined because of insufficiently clear rules and inadequate protection for investors."
Following in the wake of the multi-million-euro Parmalat fraud scandal, a storm this summer involving Bank of Italy governor Antonio Fazio has caused growing concern over the image of the country's financial system abroad.
Siniscalco, who has already called publicly for Fazio's resignation, repeated his charge that the central banker had failed to act convincingly as an independent regulator of the banking system.
The minister spoke earlier this month about possible "concrete action" by the government to force Fazio out. But he made no mention of such moves while addressing the Senate, preferring to speak in more general terms.
"Times change and the Bank of Italy must change too," he said, referring obliquely to suspicions that the central banker favoured an Italian suitor over a foreign one in a take over battle for a northern bank.
"Ownership of banks must be achievable without administrative discrimination by authorities on the basis of nationality." Siniscalco said the government had been forced to come up with its own reform of the Bank of Italy because the institute had failed to bring itself into line with international standards.
One of the glaring differences between the Bank of Italy and other central banks is the lifetime tenure of its president. "The government saw anomalies but hoped that the necessary corrections, such as a term mandate for the governor, would be introduced by the Bank itself," Siniscalco said.
"We waited nine months but there was no trace of internal reform."
The government has come up with a proposal to limit the Bank of Italy governor's mandate to seven years. Under the proposal the limit would only come into effect with Fazio's successor.
The proposed reform of the Bank of Italy has been sent to Frankfurt to be examined by the European Central Bank which is looking into the entire affair.
ECB President Jean-Claude Trichet, in Brussels on Wednesday to address the European Parliament, noted an aspect of European norms which further complicated the debate over Fazio and his possible departure.
He said that a central banker already in office when a reform was passed must be allowed to stay in office for at least five years. Fazio, for his part, has said he did nothing illegal and also said he is ready to cooperate with parliament in resolving the matter. Trichet has called on all parties to work closely together to find a solution.
