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Italian parliament launches bank enquiry, but time limited
September 27, 2017 / 4:54 PM / 3 months ago

Italian parliament launches bank enquiry, but time limited

ROME (Reuters) - A parliamentary commission set up to investigate recent Italian banking scandals met for the first time on Wednesday, but it will have little opportunity to reach any meaningful conclusions before the legislature ends.

The commission is made up of 40 parliamentarians from the upper and lower chambers and, as a first act, they picked veteran centrist politician Pier Ferdinando Casini to chair their discussions.

The cross-party commission has the same investigative powers as the magistrature and the opening of its work comes at a delicate moment for the banking sector, with the mandate of Bank of Italy Governor Ignazio Visco up for renewal in November.

The role of the Bank of Italy and bourse watchdog Consob, which share supervision of the sector, is expected to come under scrutiny.

But the legislature must end by next February, making it extremely hard for lawmakers to delve deeply into a battery of scandals and crises that have rocked Italian banks in recent years.

The government has had to spend more than 20 billion euros ($23.50 billion) this year to prop up the sector, injecting 5.4 billion euros to salvage Italy’s fourth-biggest bank, Monte dei Paschi di Siena, and offering billions of euros in guarantees as it wound down two major banks in the Veneto region.

Four other smaller banks were wound down in 2015, hitting thousands of small savers.

Critics have accused both the Bank of Italy and Consob of failing in their oversight duties -- allegations both bodies have rejected.

Former Prime Minister Matteo Renzi wrote in a recent book that he regretted his decision to rely “almost exclusively” on Bank of Italy for advice in how to deal with ailing lenders.

Opposition parties have also accused the ruling Democratic Party of mishandling the crisis and interfering illegally in the affairs of some lenders -- accusations ministers have denied.

The choice of Casini as commission chairman has raised some eyebrows, given comments he made in April warning that a bank enquiry could damage Italy’s institutions and serve only as electoral propaganda ahead of the forthcoming election.

“A demagogic frenzy ... will bring no good to the institutions,” he wrote in a blog.

The parliamentary commission has not yet decided how far back its enquiry should reach, with some politicians pushing for the review to cover the past decade to include the time Mario Draghi, the governor of the European Central Bank, was head of the Italian central bank.

Writing by Crispian Balmer; Editing by Edmund Blair

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