SIENA/ROME Jan 29 European Central Bank head
Mario Draghi, head of Italy's central bank until 2011, met
Economy Minister Vittorio Grilli to discuss the widening
scandal at Monte dei Paschi bank a day before Grilli
was due to address parliament on the issue on Tuesday.
An ECB spokesman in Frankfurt confirmed the meeting,
declining to give any details, but a source with knowledge of
the encounter said earlier it was likely they talked about
Grilli's address to a parliamentary committee later on Tuesday.
As governor of the Bank of Italy from 2005 until late 2011,
Draghi was responsible for supervision of the banking sector
when Monte Paschi got into trouble following its 9-billion-euro
cash acquisition of rival Banca Antonveneta in 2007, just before
the global financial crisis broke out.
A series of complex derivatives trades, apparently aimed at
massaging accounts to lessen the impact of past losses, are also
in focus in the scandal, after the bank revealed last week that
they had led to losses of as much as 720 million euros ($969.19
The case, involving allegations of bribery and corruption
connected with the Antonveneta acquisition, has raised questions
over the future of Italy's third-largest bank, which depends on
state support to continue, and to the wider issue of links
between politicians and Italian banks.
Grilli is expected to outline the actions of the government
and the Bank of Italy in overseeing the Antonveneta acquisition,
as well as the derivatives and structured finance transactions
which a central bank report had already identified as
problematic as long ago as 2010.
He is due to address a finance committee hearing in
parliament at 1400 GMT and prepared for the session at his
meeting with Draghi in Milan on Monday.
"Draghi was already in Milan. There was a meeting with
Grilli at the office of the Economy Ministry in Milan," the
source with knowledge of the meeting said.
Prosecutors in Siena are investigating allegations of
massive bribery connected with the Antonveneta acquisition,
judicial sources say, and newspapers on Tuesday identified
several senior former managers of Monte Paschi as under
The Bank of Italy has said that Monte Paschi management
concealed vital information connected with the loss-making
Monte Paschi chief executive Fabrizio Viola, appointed last
year after a clear-out of the bank's former management, has
acknowledged accounting irregularities by his predecessors but
said he had seen no evidence of bribery.
Giuseppe Mussari, former chairman of the bank until he was
replaced last year, resigned from his position as head of the
Italian banking association last week after Monte Paschi
revealed the problems with its derivatives trades.