Bank of Italy's new governor Draghi starts work

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Bank of Italy's new governor Draghi starts work

Bank of Italy's new governor Draghi starts work
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The new governor of Italy’s central bank, Mario Draghi, has formally started his new job.

Draghi, who is a respected economist, was appointed by Prime Minister Silvio Berlusconi’s government in December.

The 58-year-old investment banker was director general of the Italian Treasury for 10 years.

Immediately before being tapped for this job he was Goldman Sachs’ vice chairman for Europe.

In the past he has represented Italy at the G7 and European Union and served on the Inter-American Development Bank, the World Bank and the Organisation for Economic Cooperation and Development.

That background should help him restore the credibility of Italy’s central bank after his predecessor, Antonio Fazio, resigned following criticism of his handling of a disputed bank takeover bid.

Fazio is currently under investigation for alleged insider trading and abuse of office.

The scandal that unseated Fazio partly grew out of a takeover bid by the Italian insurance company Unipol for Italy’s Banca Nazionale del Lavoro. That had the effect of blocking an attempt to buy it by Spain’s BBVA.

Fazio was a strong opponent of foreign takeovers of Italian banks and never approved one.

After he resigne, the Bank of Italy rejected Unipol’s bid, on the grounds that the insurer did not have sufficient financial resources.

Unipol is however expected to appeal against that decision this week.

Draghi is believed to be much more open than Fazio to foreign banks buying up their Italian counterparts.