Visco defends Bank of Italy’s supervision of banking system

ROME (Reuters) – Bank of Italy Governor Ignazio Visco on Tuesday defended the central bank’s supervision of the financial system, which has seen 10 lenders collapse in the last two years, saying the bank was ready to explain all its actions.

In a keynote speech days after he was appointed to a second six-year mandate despite widespread political opposition, Visco said the Bank of Italy had helped to resolve banks’ difficulties “in the great majority of cases”.

However, he added that when bank directors acted quickly to avoid checks and bend the rules it was not always possible for the supervisor to intervene in time to avoid a crisis.

“We do not hesitate to justify our actions before the “political) institutions and the country,” Visco said.

Politicians of all stripes attacked Visco before his reappointment last week, and former Prime Minister Matteo Renzi, leader of the ruling Democratic Party, tried to ambush his candidacy by tabling a critical motion in parliament.

However, Visco, who has blamed a prolonged economic downturn for the banking crisis, maintained the crucial backing of Prime Minister Paolo Gentiloni and President Sergio Mattarella.

In Tuesday’s speech Visco acknowledged that the repeated crises among Italy’s banks had taken a long time to resolve, and said it was “necessary to look more deeply at the causes of the delays”.

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