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EU starts legal action against Italyon bank takeovers

EU starts legal action against Italyon bank takeovers
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The European Commission has started legal proceedings against Italy over the way its central bank, under Governor Antonio Fazio, handled takeovers of domestic banks by foreign financial institutions. The EU’s executive will start the infringement procedure with a letter giving the Italian government two months to explain its actions.

Internal Markets Commissioner Charlie McCreevy last week accused Fazio of disrespecting the spirit of European Law. The Bank of Italy regulates the country’s banking sector and Governor Fazio has been accused of favouring Italian banks over foreign ones in two takeover bids earlier this year. Dutch bank ABN Amro complained to the European Commission about the way that its attempt to buy Banca Antonveneta was handled.

Fazio has denied favouring local lender Banca Popolare Italiana in the takeover battle for Banca Antonveneta. The Italian government now has two months to justify itself to the Commission. If the response is not considered adequate, a case could be brought before the European Court of Justice. Fazio is also under investigation by prosecutors in Rome for alleged abuse of office. He has denied the allegations.