Goldman sachs manager to head italy central bank
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Outsider to head Italy's central bank
Dec. 30, 2005. 06:57 AM
ROME—Italy named outsider Mario Draghi as the central bank's new governor yesterday, moving to contain the fallout from a takeover scandal that prompted his predecessor to resign last week.
A managing director at global investment bank Goldman Sachs Group Inc., Draghi will be the first Bank of Italy governor in almost half a century to come from outside its ranks. His nomination won praise from the European Central Bank, of which he will also become a member.
"Mario Draghi has wide national and international experience and will contribute substantially to the work of the governing and general councils of the European Central Bank," spokeswoman Regina Schueller said. The ECB sets monetary policy for the 12-country euro zone.
Economy Minster Giulio Tremonti called Draghi's nomination "a result that we consider, and that I believe is considered in Italy and abroad, as strongly positive."
Draghi was expected to start his job in February, with acting governor Vincenzo Desario in charge until then, according to Italian news reports.
He replaces ex-governor Antonio Fazio, who resigned Dec. 19 after being placed under investigation for market rigging and insider trading in connection with his role in a banking takeover battle this summer. Fazio has denied wrongdoing.
Draghi, 58, was chosen under new rules for the central bank pushed through by Premier Silvio Berlusconi's government after the resignation.
The reform reduces the governor's open-ended mandate to a six-year, once-renewable term, and transfers some of the central bank's regulatory powers to Italy's competition authority. It also transfers the power of appointment to the government from the Bank of Italy's high council, or board of directors.
Draghi's appointment, along with the new rules, will help restore the credibility to the entire banking system, said analyst Lorenzo Codogno, co-head of European economics at the Bank of America in London.
Fazio, who served as central bank governor since 1993, allegedly favoured Banca Popolare Italiana Scarl in its failed takeover battle with Dutch bank ABN Amro Holding NV for Banca Antonveneta SPA.