Bank of Italy Makes Changes at Top After Populist Pressure

(Bloomberg) -- The Bank of Italy replaced its second-highest official and named two new members to its top body following months of tense relations with a populist government that questioned its record on banking supervision.

Fabio Panetta, 59, has been promoted to director general to succeed Salvatore Rossi, who told staff this month he didn’t intend to stay beyond the expiration of his term in May. The central bank also appointed two new members of its directorate, including Alessandra Perrazzelli, former Italy country manager for Barclays Bank Plc, as one of the central bank’s deputy director generals.

Panetta has been a vocal critic of the way the European institutions treated the Italian banks, a view shared by leaders in the ruling populist government. The new number two at Italy’s banking watchdog is currently a board member of the European Central Bank’s Single Supervisory Mechanism.

Perrazzelli, 57, is also the founder and former head of the Valore D, a lobby of women professionals “committed to promoting gender balance and an inclusive culture in organisations and across the country,” according to its website.

In a 2016 interview with Bloomberg, she criticized failings in the nations financial sector. “Italy’s banking system is paying for a lack of transparency and a proper governance system,” she said.

The bank also named Daniele Franco as a deputy director general. He is currently accountant general at the Treasury.

Valeria Sannucci, a deputy director general whose term also expires this year, will leave the directorate.

The three appointments come amid renewed political concerns about Italy’s financial sector. President Sergio Mattarella on Friday approved a law that will create a parliamentary commission to investigate the banking crisis that hit the country during the term of the last legislature, according to a statement from his office.

Still, Mattarella said that the lawmakers’ probe should avoid interfering with the work done by market watchdogs and regulators including the central bank because that would harm their independence.

Separately, a decree to reimburse lost savings from failed lenders is also on hold, as Finance Minister Giovanni Tria has not approved it yet, despite heavy pressure from Italy’s two deputy prime ministers.

Last month, Deputy Premier Luigi Di Maio and other Five Star Movement ministers blocked a new term for Luigi Federico Signorini, as a deputy director general at the central bank.

Matteo Salvini, leader of the League party and the other deputy prime minister, also criticized the Bank of Italy for the way it managed the nation’s banking crises over the last several years.

Five Star’s undersecretary for regional affairs, Stefano Buffagni, told a conference attended by Bank of Italy Governor Ignazio Visco this month that his party respects the central bank while at the same time demanding changes to top management.

Visco has dismissed concerns over relations with the administration, saying that the Bank of Italy is not under attack.

--With assistance from Sonia Sirletti.

To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Ross Larsen, Dan Liefgreen

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