Bank fizz

20 December 2005

Departed central bank governor Fazio was famous for the restraints he placed on bank mergers. Now he’s gone, things may lighten up. Hopefully there will be more consolidation. The question is whether the new governor will be able to meddle like Fazio did.

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Italian bank stocks have risen following Antonio Fazio's resignation as the governor of Italy's central bank. The Italian banking sector rose 1.8% on Monday and continued to rise on Tuesday led by Mediobanca and SanPaolo IMI.

Fazio has been criticised for favouring Banca Popolare Italiana's bid for Antonveneta, another Italian bank, over a rival bid by ABN Amro of the Netherlands.

Meanwhile, the Italian cabinet has agreed a set of measures to reform the Bank of Italy. These will be added into a broader savings bill which has been in the works since 2003.

Among the measures is a fixed sixyear term for the Bank of Italy governor, which can only be renewed once, according to reports. Fazio had been appointed for life. The Bank of Italy is also set to keep some of its antitrust powers in the banking sector, although in future it will exercise joint control with the antitrust authority.

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