Bank of Italy’s No. 2 Is Said to Leave Amid Government Tension

(Bloomberg) -- The Bank of Italy’s second-highest official is said to have told staff that he won’t be available for a new term, according to two people familiar with the situation, a further development in the tense relations between the central bank and the populist government.

Director General Salvatore Rossi told staff in a letter that he will leave as soon as a replacement is found, and at the latest on May 9 when his term expires. He won’t seek a new mandate for the job and as head of insurers’ supervisory body IVASS, said the people, who asked not to be named, citing the internal document.

The contents of the letter were earlier reported by Italian news agency Ansa.

Last month, Deputy Premier Luigi Di Maio and other Five Star Movement ministers forced the cabinet to postpone a decision on renewing the term of the central bank’s deputy director general, Luigi Federico Signorini. Di Maio and fellow deputy premier and League leader Matteo Salvini repeatedly criticized the institute’s record on banking supervision.

On March 8, Five Star’s undersecretary for regional affairs Stefano Buffagni told a conference attended by Governor Ignazio Visco that his party respected the central bank while demanding changes to top management.

Visco has dismissed concerns over the relations between the central bank and the populist administration, saying that the Rome-based institute is not under attack and that its independence requires it to be accountable.

Earlier this month, Sole 24 Ore reported that the government may extend the mandate of Signorini while requesting the replacement of Rossi, 70, citing people familiar with talks between Visco and Premier Giuseppe Conte.

To contact the reporters on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net;Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Fergal O'Brien at fobrien@bloomberg.net

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