October 10, 2005
Fazio questioned over Italy bank takeover affair
By Valentina Consiglio
ROME (Reuters) - Bank of Italy Governor Antonio Fazio,
under pressure to resign over a bank takeover battle, on Monday
faced questions from magistrates investigating him for abuse of
three-month-long saga that many politicians and business
leaders say has tarnished Italy's image.
The court appearance has taken the Fazio affair to a new
level because the magistrates' decision on whether they believe
Fazio has abused his office or not will be a key element
affecting his future as bank governor.
Fazio arrived at the Rome courts building just before 10
a.m. (0800 GMT) and walked briskly into the offices of Chief
Rome Prosecutor Giovanni Ferrara and Achille Toro, who is
leading the bank probe.
One of his lawyers, Roberto Borgogno, told reporters Fazio
had agreed to answer the prosecutor's questions and not to
exercise his right to remain silent.
Fazio was placed under official investigation in August
over accusations that he unfairly favored Banca Popolare
Italiana over Dutch competitor ABN AMRO for control of domestic
The Bank of Italy's chief inspector, Francesco Frasca, is
also being investigated for abuse of office.
Being placed under investigation does not mean charges will
necessarily be brought. There was no immediate comment from the
Bank of Italy on Monday's questioning but it has previously
reiterated it handled the takeover battle correctly.
The autocratic bank chief has been in the spotlight since
wiretaps, leaked to the press in July, showed his warm relation
with the former CEO of Pop Italiana, prompting calls for Fazio
to step down.
Although Prime Minister Silvio Berlusconi and several
government minister have urged Fazio to quit, the central
banker -- who does not report to the government -- has
resisted. The European Central Bank has indicated it cannot
The Bank of Italy's Superior Council, the only body which
can fire Fazio, last month expressed confidence in him, leaving
the judiciary as possibly Fazio's biggest obstacle to remaining
in office. Fazio has an open-ended mandate.
TIES TO BANKER
Italy's biggest newspaper, Corriere della Sera, said Fazio
would stick to the defense he made in a speech on August 26 to
a government interministerial committee in which he said the
central bank had not broken any laws.
After questioning Fazio, prosecutors will have several
weeks to decide whether or not to press charges. A judge would
have to accept any proposed charges before Fazio could be sent
to trial. Abuse of office carries a jail term of up to three
Fazio has not spoken publicly about the scandal and he did
not speak to reporters when he entered the court house.
The governor's lawyer, Franco Coppi, had advised him to
decline any request for questioning, saying Fazio's answers
would be leaked, distorted and taken out of context.
Corriere della Sera said the magistrates would likely ask
Fazio to discuss his relationship with Gianpiero Fiorani, Pop
Italiana's former CEO.
The central bank governor oversees the financial sector and
is meant to be an impartial arbiter. The wiretaps showed both
Fazio and his wife advising Fiorani on the takeover plan.
Fazio eventually overruled the central bank's technical
department, which had advised against letting the much smaller
Pop Italiana bid for Antonveneta.
Fiorani resigned as CEO in mid-September after he was
placed under investigation for possible crimes ranging from
insider trading to market-rigging.
Pop Italiana eventually withdrew its bid for Antonveneta,
leaving the way clear for Dutch bank ABN AMRO.