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Last Updated: Thursday, 29 September 2005, 15:12 GMT 16:12 UK
Italy bank backs tarnished chief
Antonio Fazio, Bank of Italy Governor
Mr Fazio's position is looking secure
The ruling council of the Bank of Italy has given renewed backing to embattled governor Antonio Fazio, despite high-level calls for him to quit.

The board said most members had offered "expressions of faith" in the governor.

Senior politicians, including Prime Minister Silvio Berlusconi, have called on Mr Fazio to resign over the way he handled a controversial bank takeover.

He was accused of favouring a domestic bidder in the battle for Banca Antonveneta, but has denied wrongdoing.

Thursday's meeting was considered vital to Mr Fazio's future, since only the bank's superior council has the power to remove him.

We can't ask for his dismissal on the basis of a media campaign which the politicians have climbed on board
Paolo Blasi, Bank of Italy councillor

It would have required a two-thirds majority of the council's 13 members to remove Mr Fazio from office.

However, most of the council's members - drawn largely from business and academia - are believed to be close to the governor.

Before the meeting began, the AGI news service quoted council member Paolo Blasi as saying that Mr Fazio's position would not be discussed.

"We can't ask for his dismissal on the basis of a media campaign which the politicians have climbed on board," he was reported as saying.

Political pressure

The central bank governor has come under pressure to resign following allegations that he tried to block Dutch bank ABN Amro's takeover of Italy's Banca Antonveneta.

Mr Berlusconi has claimed that the governor's continuation in office is "not compatible with national credibility", but has admitted that he does not have the power to oust him.

Mr Fazio was appointed for life and the Bank of Italy is independent from government.

Silvio Berlusconi
Silvio Berlusconi says he has tried to persuade Mr Fazio to step down

Separately, the Bank of Italy said reports that Mr Fazio would be questioned as part of an ongoing judicial inquiry into the Antonveneta takeover were incorrect.

Media reports on Wednesday claimed the governor would be interviewed by magistrates investigating alleged insider dealing by two bankers who acquired shares in Antonveneta.

A Bank of Italy spokeswoman said the claims were "without foundation".

The Bank of Italy also confirmed that it had formally revoked its approval of Banca Popolare Italiana's bid for Antonveneta which originally triggered the banking scandal.

The decision enables prosecutors to lift a restraining order on Popolare's 29.5% stake in Antonveneta which has been frozen for several months.

The stake is set to be bought by Dutch bank ABN Amro.

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