ROME – Italy’s populist government launched an unprecedented attack on the country’s central bank over the weekend, saying its top brass should be replaced because it had failed to supervise effectively the country’s troubled banking sector.
The leaders of Italy’s governing coalition, Matteo Salvini of the nativist League party and Luigi Di Maio of the anti-establishment 5 Star Movement, lambasted the management of the Bank of Italy for failing to avert the collapse of a number of banks, which resulted in losses for shareholders and some bondholders, including tens of thousands of mom-and-pop savers.
The government can’t impose new management on the independent Bank of Italy. But it can withhold approval for the bank’s own senior appointments, creating the potential for an institutional standoff. The mandate of one of the bank’s deputy governors expires on Monday.
“We are here because those who were supposed to supervise didn’t supervise,” Salvini told a meeting on Saturday of investors in Banca Popolare di Vicenza, which was liquidated in 2017.
Salvini also accused Italy’s stock-market regulator, Consob, of having failed to supervise the sale of shares and bonds to small investors. He called for a “reset” of both institutions.
The Bank of Italy and Consob declined to comment.
The move is the latest clash between the League and 5 Star Movement and Italy’s establishment, including civil servants, mainstream media and centrist politicians, whom the now-dominant populist coalition accuse of having failed Italy, the Dow Jones report added.
The government, in power since last June, also has verbally assaulted establishment politicians and technocrats abroad, from European Union authorities and the French government to the International Monetary Fund.
The coalition parties recently criticized the Bank of Italy for making more pessimist economic forecasts than the government’s own.
Antipathy to the Bank of Italy is one issue on which Messrs. Salvini and Di Maio can agree.