Leadership race heats up at Bank of Italy

Bloomberg

The euro area’s third-largest economy is seeking someone to help oversee its struggling recovery — and review the European Central Bank (ECB) stimulus the country relies upon.
Competition for the top job at the Bank of Italy, which comes with a seat on the ECB’s Governing Council, is heating up. The position has a high-profile history — ECB President Mario Draghi led the Rome-based central bank from the end
of 2005 until 2011, and earlier
governors Luigi Einaudi and Carlo Azeglio Ciampi went on to be national presidents.
Although Draghi’s successor Ignazio Visco could be reappointed when his term ends this fall, the field is filled with credible potential candidates such as Finance Minister Pier Carlo Padoan, according to Italian media. Other names in the frame include ECB Supervisory Board member Ignazio Angeloni and economist Lucrezia Reichlin.
The changeover comes at a sensitive time for the ECB, which is about to consider whether the euro area’s robust recovery warrants winding down its quantitative-easing programme. The difficulty for Italy is that it is probably the region’s biggest weak spot, with slow growth and an acute problem of non-performing loans.
The 67-year-old Visco, who started his six-year term on Nov. 1, 2011, has run into criticism over his handling of the country’s banking predicament, leading to speculation he may be a one-term governor.
The central-bank chief must be “able to successfully deal with Italy’s banking crisis, which isn’t over yet,” said Luigi Zingales, a professor at the University of Chicago Booth School of Business, who has been mentioned as a choice by Rome’s la Repubblica newspaper.
Visco’s challengers may include two colleagues at the central bank, Senior Deputy Governor Salvatore Rossi and Deputy Governor Fabio Panetta, according to news reports. Like Angeloni, Panetta is a member of the board of the ECB’s Single Supervisory Mechanism, which oversees the region’s largest lenders.
Another possible pick is said to be Andrea Enria, chairman of the European Banking Authority.
Gender might play a role, giving an edge to candidates such as Reichlin, currently a professor at London Business School. If chosen, she would become the central bank’s first female governor in its more than 120-year history.
Reichlin was a schoolmate of Italian Premier Paolo Gentiloni in the early 1970s in Rome and has long-standing associations with central banks in Europe and the US. A former head of economic research at the ECB, she was reportedly considered in 2014 for a deputy governor position at the Bank of England. Her disadvantage may be that she has mostly lived abroad.
Draghi has expressed his concerns about the limited female representation in ECB and in the currency bloc’s national banks. Among the 25 policy makers, only two are female — Executive Board member Sabine Lautenschlaeger and Cypriot central-bank Governor Chrystalla Georghadji.