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New chief to restore faith in Italy's Central Bank

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New chief to restore faith in Italy's Central Bank

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Looking for a steady hand at the helm, the Italian government has named investment banker Mario Draghi as head of the country’s Central Bank. It is hoped his nomination will restore credibility to an institution rocked by a takeover scandal that ultimately forced its previous chief to resign. Both Prime Minister Silvio Berlusconi and President Carlo Azeglio Ciampi were keen to find a replacement as soon as possible.

The appointment of the former treasury official has been welcomed by the main opposition in Italy and international market analysts. Draghi, 58, has a wealth of international experience but faces arduous challenges including rebuilding morale at the Bank of Italy. He is considered less autocratic than his predecessor Antonio Fazio and less hostile to attempts by foreign firms to enter Italy’s lucrative banking sector. Fazio quit last week, finally succumbing to months of pressure. He faces accusations that he unfairly favoured an Italian bank over a Dutch rival in a takeover bid for Banca Antonveneta. Fazio, who denies the allegations, is now under investigation for insider trading and abuse of office.