By Stefano Bernabei and Philip Pullella
ROME, Oct 19 (Reuters) - The Bank of Italy and its governor,
Ignazio Visco, came under increased scrutiny on Thursday when
former Prime Minister Silvio Berlusconi joined a chorus of
politicians criticising its operations.
Visco's mandate expires at the end of the month and he is
eligible to serve another six-year term.
But what had been considered almost a given was thrust into
uncertainty on Tuesday when the ruling Democratic Party (PD)
passed a parliamentary motion calling for a "new phase" at the
This was seen as implicit criticism of Visco and the bank's
supervisory operations as 10 banks have collapsed in the last
The "Visco Affair", which is dominating Italian media, has
ignited an institutional tug-of-war between political parties
and the president, who makes the ultimate decision on who to
appoint as central bank chief.
Berlusconi, a key player in the centre-right coalition that
is looking to make a comeback in national elections next year,
joined the fray by taking a jab at the bank, echoing the attacks
of the centre-left and other parties.
"The Bank of Italy did not exercise the control that was
expected of it," he told reporters in Brussels in response to
specific question about Visco.
However, Berlusconi's party, Forza Italia (Go Italy!) has
not taken a unified stand on the bank affair and many of its
members are still believed to back a second term for Visco.
According to Italian law, President Sergio Mattarella
appoints the central bank governor, after consulting Prime
Minister Paolo Gentiloni. The Bank of Italy's own supervisory
board also has a say.
In a rare statement seen as a direct rebuke of the PD's
motion against Visco, the head of state said everyone should
"respect their own roles."
Mattarella favours renewing Visco, who has been in office
since 2011, for a second mandate, a government source told
The growing criticism of the central bank from virtually all
the main political parties could, however, make it harder for
Mattarella to re-appoint Visco, who banking sources say is a
close ally of European Central Bank President Mario Draghi.
Candidates to succeed Visco include Fabio Panetta, Italy's
representative to the ECB's bank supervisory board and the
deputy governor of the Bank of Italy Salvatore Rossi.
The central bank has defended its actions, saying a spate of
bank scandals and failures were due to Italy's worst post-war
economic crisis, and it did everything in its powers to defend
Last month, a cross-party commission was set up in
parliament to investigate the bank scandals, though it is
unlikely to complete its work before the election.
Though he has declined comment on the affair, Visco made an
unexpected visit to the commission on Wednesday night to show
members documents which Italian newspapers said defended the
Though the ECB started directly regulating Italy's 15
largest banks in 2014, the Bank of Italy continues to supervise
the financial health of the rest of the sector.
(additional reporting by Giselda Vagnoni, Steve Scherer,
Valentina Consiglio, Massimiliano di Giorgio,; Editing by
© 2017 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.