MNI: BOI Visco Position Worsens; Italy Gov Backs Motion -Renzi

By Silvia Marchetti

     ROME (MNI) - The chances of Bank of Italy governor Ignazio Visco being

reappointed to his position narrowed further Thursday, after former premier

Matteo Renzi said the government had backed his party's anti-Visco motion passed

by the Lower House earlier this week.

     Renzi, in an interview to local paper Quotidiano, said Prime Minister Paolo

Gentiloni had given the green light to the motion that was presented by the

Democratic Party and approved with 213 yes votes out of a total 315.

     Renzi's comment appear to leave very little space for a renewed term for

Visco, whose mandate expires on October 31 after a 6-year term at the head of

the central bank.

     The former premier, and now front-runner for next year's general election,

has more than once criticized Visco for a lack of control in preventing several

banking crises that have rocked Italy. But it is the first time he makes a

direct move against Visco.

     "Someone must pay for not having properly supervised the banks, or should

we say it is the fault of destiny? We pushed through parliament a motion which

was backed by a positive feedback from government, let's not forget this, in

which my party expressed a judgement on what has happened to Italian banks these

years," Renzi told the paper.

     "The government not only knew about the motion, but in order to be in

compliance to parliament code, it had given its green light to it," added Renzi.

     Gentiloni's office has declined to comment on Renzi's words, but sources

stressed that the appointment of the next governor will be solely dictated by

the need to "safeguard the autonomy of the central bank".

     The Democrats' anti-Visco motion, which has been criticized by Mario Monti,

a former EU Commissioner and Italian premier, formally asks the "government to

adopt useful initiatives to reinforce the efficiency of the bank's supervision

on the banking system to safeguard savers and to boost trust among citizens by

identifying, to such end, the most qualified figure able to ensure a renewed

confidence".

     The Democrats in Parliament cannot directly appoint Visco's successor,

which is in the gift of the government, but it is certainly a powerful voice in

the debate and the motion is a likely turning point for a new appointment,

according to party sources.

     The central bank says every decision taken and every move made to safeguard

Italy's banking system was done in accordance with the government. The bank is

ready to submit all necessary documents to any parliamentary commission set-up

to investigate in the bank defaults, and Visco is willing to be questioned, said

sources close to the bank.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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