MNI SOURCES: Italy Eyes ECB Coeure Position In Post-Draghi Era

--Bank Of Italy's Visco, Panetta Seen As Leading Candidates

     LONDON(MNI) - Italy is confident it will get a seat on the European Central

Bank's Executive Board when Benoit Coeure steps down in December, maintaining

their 'Big Four' representation following the departure of current President

Mario Draghi in October, sources told MNI.

     France's Christine Lagarde will replace Draghi from November 1, leaving

Italy without representation on the ECB's board and Rome believes they, as one

of the bank's biggest stakeholders and the third-largest Eurozone economy,

should be represented "by right" and the Market Operation department currently

run by Coeure would be an acceptable position.

     Rome's Council of Ministers, chaired by Prime Minister Giuseppe Conte, will

nominate an appointment in coming months, with a monetary policy expert expected

to be put in place. The nominee will then be approved (or not) by the European

Council after consultation with the European Parliament and the ECB Governing

Council. 

     --IN THE FRAME

     Italy feels it has at least two highly qualified candidates and MNI

understands that current Bank of Italy governor Ignazio Visco and his

second-in-command, senior deputy governor Fabio Panetta are to the fore,

although sources at the Bank accept there is no written rule guaranteeing them

the spot.

     But Rome's populist government, which has been at odds with the BOI in

recent months, pushing the Bank to better represent Italian interests, could

nominate an external, technocrat.

     Panetta was granted a second term earlier this year by the coalition

government, before being promoted to senior deputy governor in May. He also

chairs the BOI-supervised IVASS insurance authority. He is supported by both the

5 Stars Movement and the League party, who aim to reform and strengthen the ECB.

     As a member of the Single Supervisory Mechanism's Supervisory Board Panetta

has called for changes to EU rules on bailing-in bondholders at failing banks

and for easier timetables in reducing non-performing loans.

     Visco's mandate was renewed in October 2017 by the previous Democrat-led

cabinet and he might have fewer chances of being chosen by the government

compared to Panetta. He already sits in the Governing Council and BOI's

supervision of Italian banks on his watch have been repeatedly criticized by

both the League and 5 Stars.

     Another government source noted that Italy not to securing a board seat

when Coeure goes would be seen as "a negative move against Rome" at a tense

moment in time. There would be other opportunities to appoint an Italian when

Luxembourg's Yves Mersch' term ends in December 2020 and Germany's Sabine

Lautenschlaeger in January 2022, the source said, but "the sooner, the better".

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

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