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Last Updated: Sunday, 4 September 2005, 13:21 GMT 14:21 UK
Italy bank chief urged to resign
Bank of Italy Governor Antonio Fazio
Mr Fazio has so far resisted demands for him to quit his post
The Italian government has stepped up the pressure on Bank of Italy governor Antonio Fazio to resign.

Economy Minister Domenico Siniscalco said he had expected Mr Fazio to "do the sensible thing" and step down after reform of its central bank was agreed.

The central bank reforms were agreed on Friday, after it hit by controversy over a long-running takeover battle.

"If I had been Fazio, I would have resigned," Mr Siniscalco told political and business leaders.

His comments came a day after Deputy Prime Minister Giulio Tremonti called on Mr Fazio to resign his post.

However, Prime Minister Silvio Berlusconi has so far refused to comment on the situation, saying only that Mr Fazio should "follow his conscience".

The demands for Mr Fazio's resignation follow controversy over the central bank's handling of Banca Popolare Italiana's bid for its rival Antonveneta.

The bid - which was up against a rival offer from Dutch bank ABN Amro - was approved by Mr Fazio after he overruled a number of senior regulators who expressed concerns about its viability, prompting critics to accuse Mr Fazio of favouritism.

Shake-up

On Friday, Italy's cabinet took steps to improve the image of the bank by approving a package of reforms.

Under the measures, the tenure of the bank's governor has been reduced to seven years - in line with other European central banks.

But this will not apply to the current chief who has been in place for 12 years - and the proposals also still need to win parliamentary approval.

Meanwhile, a change to the bank's regulatory procedures, which would ensure key decisions are taken by committee and not a single individual, has also been mooted.




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