Analysis : Protecting the Italian economy

In this article on cafebabel.com, James Fontanella argues that the banking scandal that erupted in Italy at the end of 2005 was not merely an Italian tragedy, since it put at stake the credibility of the European Union’s free market.

A financial storm blew up in Italy last summer after the governor of the central bank, Antonio Fazio, blocked the foreign takeover bids for two Italian banks, Banca Antonveneta and Banca del Lavoro (BNL), made by two foreign banks, ABN AMRO, (Dutch) and a Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA – Spanish). 

Soon after rejecting the foreign takeovers, he demonstrated his support of Banca Popolare Italiana (BPI) and the insurance group Unipol, which had also targeted Banca Antonveneta and BNL respectively. It was widely alleged at the time that he thereby abused his position as central bank governor in order to protect the Italian banking system from falling into the hands of foreign bidders.  

Fazio has since resigned.

To read the article in full, please click here.