Antonio Fazio, the Bank of Italy governor, may have decided to favour a domestic bank in a cross-border takeover battle even before hearing contrary arguments from his own officials, it was suggested yesterday.
The insights into Mr Fazio's attitude emerged from reports of transcripts of tapped telephone conversations involving Francesco Frasca, head of the Bank of Italy's inspectorate, who is under investigation.
Opposition politicians and trade unionists are calling for Mr Fazio's resignation on the grounds various transcripts, leaked to the press over the past week, suggest he favoured Banca Popolare Italiana (BPI) over ABN Amro of the Netherlands in a bidding war for Banca Antonveneta, another Italian bank. The Bank of Italy denies any wrongdoing in the affair, and Mr Fazio is not personally under investigation.
As prosecutors deepened their inquiries into BPI's behaviour, the Bank of Italy ordered last Saturday that BPI's bids for Antonveneta should be suspended.
One important issue for the prosecutors is why Mr Fazio overruled a recommendation from Giovanni Castaldi and Claudio Clemente, two senior Bank of Italy officials, that BPI's financial strength was insufficient to justify approving its bids.
According to people who have seen court documents citing Mr Frasca's conversations, which judicial investigators ordered to be tapped, Mr Frasca tried to persuade Mr Castaldi to change the recommendation, but Mr Castaldi refused.
Mr Frasca then allegedly spoke with another, unnamed person, saying: "Two officials who serve under me have, without my knowledge, concluded an inquiry on the possible approval for Popolare Lodi [BPI's former name], with a clearly negative judgment. Now I must pass on this judgment to the governor, who has already told me in advance that he will not accept it . . ." In a second conversation, Mr Frasca was allegedly recorded as saying: "This judgment was a blow below the belt, then Castaldi refused to change it . . . The governor was very worried about this."
The Bank of Italy declined to comment on the latest transcripts and said Mr Frasca was unavailable for comment. According to the Bank of Italy, approval was given for BPI's bids on July 12th after consultation with legal experts who said the offers could go ahead.
But it emerged last week, from a tapped phone conversation between Mr Fazio and Gianpiero Fiorani, BPI's now suspended chief executive, that before an official announcement was made, Mr Fazio had called his friend to tell him he had approved his bank's bids for Antonveneta.
Italy's centre-right government decided on Wednesday to postpone any action until a special government financial committee meets in late August.
