UPDATE 1-Saccomanni seen replacing Draghi as Bank of Italy chief

Wed Sep 21, 2011 12:42pm EDT

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By Paolo Biondi

ROME, Sept 21 (Reuters) - Fabrizio Saccomanni, the deputy governor of the Bank of Italy, is likely to be named soon to take the top job when his boss Mario Draghi leaves to become head of the European Central Bank at the end of October.

A political source from the ruling majority told Reuters that Prime Minister Silvio Berlusconi will propose Saccomanni as the next BOI chief when he meets the head of state Giorgio Napolitano later on Wednesday.

"Berlusconi will indicate Saccomanni as Draghi's successor," said the source, who asked not to be named.

Berlusconi said in Brussels at the end of June that Saccomanni was one of three three candidates to replace Draghi, along with Treasury Director General Vittorio Grilli and Italy's ECB executive board member Lorenzo Bini Smaghi.

However in recent weeks 68 year-old Saccomanni, who is widely considered to be Draghi's favourite candidate, has emerged as the clear favourite, political sources say.

Grilli's chances have diminished because his main sponsor, Economy Minister Giulio Tremonti has fallen from Berlusconi's graces and become increasingly isolated in the ruling coalition as Italy has become embroiled in the euro zone debt crisis.

Bini Smaghi, whose term at the ECB does not end until 2013, has been one of the most influential ECB board members and is viewed as a particularly strong candidate outside Italy, but he lacks political support at home.

Saccomanni has spent his professional life at the Bank of Italy since joining in 1967, interrupted by stints at the International Monetary Fund from 1970-1975 and as vice president of the London-based European Bank for Reconstruction and Development from 2003-2006.

Saccomanni, who keeps a low public profile, has always been a strong advocate of European Monetary Union and was involved in the preparation of the single currency project at the European levels in the 1990s.

He seldom speaks publicly about market-sensitive issues and does not have a clear profile either as an inflation hawk or a dove.

(Writing by Gavin Jones; editing by Ron Askew)

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