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Bank of Italy will gain greater independence, says governor

Revaluation of central bank shares to increase shareholder base

03 February, 18:36
Bank of Italy will gain greater independence, says governor (ANSA) - Rome, February 3 - Revaluation of the capital held by the Bank of Italy will help end the perception it is overly dependent on commercial banks, Governor Ignazio Visco said Monday.

Speaking after financial markets closed, Visco said that the controversial reforms will "put an end to the idea that the central bank is independent of the State but dependent on banks," said Visco.

That should boost the perception of the central bank's overall independence, he said. At the same time, the bank will not only continue to transfer resources to the State each year but reform could "widen the net profit" for the government, he said.

The revaluation of the central bank will increase the balance sheets of the commercial banks that are its shareholders - something that has triggered outrage by opposition parties, including the anti-establishment 5-Star Movement, which has called it a "gift" to the banks.

That in turn contributed by scuffles and vicious insults last week in the Lower House among politicians. Visco also suggested the reforms could encourage commercial banks to increase the amount they are willing to loan and thus, boost stagnant economic growth.

Late last month, Italy's parliament approved a new law that revalues the central bank's capital, which is mostly owned by Italian commercial banks, and set a 3% limit on stakes that any individual investor can hold in the bank.