Pressure mounts on Fazio to quit

Pressure is mounting on embattled Bank of Italy governor Antonio Fazio to quit over a bank merger scandal.

Mr Fazio has so far ignored widespread calls for his resignation, but Italy’s economy minister has now threatened to oust him.

The news came as it emerged that Mr Fazio is now being investigated for alleged insider trading.

The probe is part of a wider inquiry into Banca Popolare Italiana’s (BPI) failed bid for Banca Antonveneta.

Mr Fazio had already been accused of abusing his position in trying to keep Banca Antonveneta out of the hands of rival bidder, Dutch bank ABN AMRO.

The allegations have been roundly dismissed by Mr Fazio, who said he has “an absolutely clear conscience” about the affair.

To date, the Italian government has said that only the central bank’s Superior Council, most of whose members were appointed by Mr Fazio, can remove the governor.

However news of the latest insider trading allegations has weakened his position.

In an interview with Repubblica Radio, Economy Minister Giulio Tremonti said Mr Fazio should stand down or face government action.

“It’s a situation which is no longer acceptable,” he said.

“Either the governor takes a step back, or the government and parliament should take a step forward, because as things stand this situation is costing too much for citizens and for the country.”

The former chief of Banca Popolare (BPI), Gianpiero Fiorani, was arrested earlier this week.

He is in prison awaiting questioning over allegations of embezzlement, market rigging and money laundering.

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