Court cuts jail sentence of ex-Bank of Italy boss

MILAN May 28 (Reuters) - An appeals court sentenced Italy's former bank governor Antonio Fazio to two years and six months in jail on Monday for attempting to thwart a foreign takeover of domestic lender Antonventa in 2005, a scandal that led to his exit from the Bank of Italy.

A lower court had initially sentenced Fazio to four years but that verdict was softened as some of the charges lapsed because of the statute of limitations.

Fazio, at the helm of the Bank of Italy since 1993, was forced to quit at the end of 2005 after wire-tapping transcripts showed him favouring financially-stretched domestic bidder Banca Popolare Italiana over Dutch rival ABN AMRO for the control of Antonveneta, now part of Banca Monte dei Paschi di Siena .

The departure of Fazio, who was replaced by Mario Draghi, paved the way for an unprecedented wave of mergers and takeovers in Italy's protected banking system and for a review of the role of Italy's central bank head.

The sentence could still be overhauled by Italy's supreme court.

Fazio, now 75, is in any case unlikely to go to jail because of his age and because the sentence would fall under an Italian amnesty.

(Reporting By Sara Rossi and Lisa Jucca)