(ANSA) - The Italian government said on Friday it would attempt to force Bank of Italy Governor Antonio Fazio to resign after it emerged that he has been placed under investigation for insider trading by Milan magistrates probing a bank takeover scandal.
But Fazio, who is also being probed in Rome for abuse of office, said in a statement that he had not yet been formally notified by Milanese prosecutors that he is suspected of wrongdoing in the takeover of Banca AntonVeneta.
"I know I have respected the laws and I have an absolutely clear conscience."
The statement said that the governor had learned he was being probed by the Milan prosecutors from newspapers and that he could neither "confirm nor deny" the report. Earlier on Friday, Premier Silvio Berlusconi told reporters the cabinet would hold an emergency meeting on Tuesday to discuss the scandal.
Economy Minister Giulio Tremonti, who has repeatedly urged Fazio to step down, said the situation was "no longer acceptable."
"If the governor does not take a step backwards it will be up to the Government or Parliament to make the first move," said Tremonti.
The minister said he would propose that a new governor be named after consulting with parliament and the opposition.
"Clearly, the government will not decide in an autocratic manner. The government is not trying to encroach on the powers of the Bank of Italy; it's the other way round," he said.
FAZIO UNDER INVESTIGATION IN MILAN SINCE SEPTEMBER.
According to judicial sources, Milanese prosecutors have been investigating Fazio's role in the AntonVeneta takeover since September, after his close friend and former CEO of Banca Popolare Italiana (BPI) Gianpiero Fiorani was placed under investigation.
On Wednesday, Fiorani was arrested on suspicion of criminal conspiracy to embezzle.
Arrest warrants were issued for four of his associates while some 80 others were placed under investigation. Several top-level politicians were reported to be involved in the probe on suspicion of having accepted illicit funds but their names have not been released.
Fiorani is already under investigation for price-fixing, insider trading and hindering the work of market regulators while he tried to engineer the takeover of Antonveneta. Fazio's reputation was badly tarnished after published transcripts of wiretaps ordered by magistrates appeared to show that he and his wife worked behind the scenes to help BPI and Fiorani against Dutch rival ABN Amro.
ABN Amro eventually prevailed in its bid after Italian judicial probes blocked the BPI operation.
Fazio, 69, has already been quizzed by Rome prosecutors about his July 11 approval of BPI's bid for Antonveneta.
Two top Bank of Italy inspectors tasked with vetting BPI's bid had decided it could not be approved because of doubts over the bank's capital and the alleged inadequacy of some of the documentation provided. Fazio overruled their objections after consulting with 'outside experts', according to press reports.
His position has not been helped by new allegations that he and his family regularly received expensive, luxury gifts from Fiorani including watches and jewellery. European Central Bank chief Jean Claude Trichet reminded reporters on Friday that it has not yet "been proven that Fazio received gifts." But he stressed that if this were ascertained, it would be a clear breach of ECB rules.
"The ECB would ask for clarifications," said Trichet.
The ECB said recently that Fazio had used the discretionary powers given him by national law when dealing with foreign takeover bids. But on Tuesday, the European Commission approved the start of legal action against Italy over its legislative
position on takeover bids by foreign banks.
Meanwhile, a probe into another takeover battle which has also tarnished Fazio's reputation widened on Thursday.
The battle involved Italian insurer Unipol and Spain's No.2 bank, Banco Bilbao Vizcaya Argentaria (BBVA) as rival bidders for Italy's Banca Nazionale Del Lavoro (BNL). BBVA lost out to Unipol but is now challenging the takeover operation in court.
Judicial probes threaten to derail Unipol's operation, which is still awaiting a definitive green light from the Bank of Italy.
Unipol Chairman and CEO Giovanni Consorte was informed on Thursday that he had been placed under investigation by
Rome prosecutors in connection with the operation. Consorte, a close friend of Fiorani, is already under investigation for suspected market rigging linked to his involvement in BPI's Antonveneta bid. Consorte denies wrongdoing.
