Bank of Italy Makes Changes at Top After Pressure From Populists

(Bloomberg) -- The Bank of Italy replaced its second-highest official and named two new members to its top body following months of tense relations with a populist government that questioned its record on banking supervision.

Fabio Panetta, 59, has been promoted to director general to succeed Salvatore Rossi, who told staff this month he didn’t intend to stay beyond the expiration of his term in May. The central bank also appointed two new members of its directorate.

Panetta has been a vocal critic of the way the European institutions treated the Italian banks, a view shared by leaders in the ruling populist government. The new number two at Italy’s banking watchdog is currently a board member of the European Central Bank’s Single Supervisory Mechanism.

Last month, Deputy Premier Luigi Di Maio and other Five Star Movement ministers blocked a new term for Luigi Federico Signorini, as a deputy director general at the central bank. Matteo Salvini, leader of the League party and the other deputy prime minister, also criticized the Bank of Italy for the way it managed the nation’s banking crises over the last several years.

Five Star’s undersecretary for regional affairs Stefano Buffagni told a conference attended by Bank of Italy Governor Ignazio Visco this month that his party respects the central bank while at the same time demanding changes to top management. Visco has dismissed concerns over relations with the administration, saying that the Bank of Italy is not under attack.

Women at Top

The bank named Daniele Franco as deputy director general to fill Panetta’s previous post. He is currently accountant general at the Treasury. It also brought in Alessandra Perrazzelli Italy country manager for Barclays Bank Plc and a board member of the utility A2a SpA, as another deputy director general.

Perrazelli, 57, is also the former head of the Valore D, a lobby of women professionals “committed to promoting gender balance and an inclusive culture in organisations and across the country,” according to its website.

Valeria Sannucci, a deputy director general whose term also expires this year, will leave the directorate.

The three appointments come amid renewed concerns about Italy’s financial sector. President Sergio Mattarella is reportedly undecided on whether to sign a law that would create a parliamentary commission to investigate the banking crisis that hit the country during the term of the last legislature.

Separately a decree to reimburse lost savings from failed lenders is also on hold, as Finance Minister Giovanni Tria has not approved it yet, despite heavy pressure from Italy’s two deputy prime ministers.

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