* Visco will serve another six years
* Ruling party and 5-Star had opposed his appointment
* Bank supervision flash point before national vote next year
* Senate president quits ruling PD in dissent with Renzi (Adds background, details)
By Steve Scherer and Gavin Jones
ROME, Oct 27 (Reuters) - Bank of Italy Governor Ignazio Visco on Friday was appointed to serve a second term of office, overcoming criticism from political factions, including the ruling Democratic Party (PD), to hang onto his job.
After the government nominated Visco earlier on Friday, President Sergio Mattarella signed a decree to appoint him to a final six-year term, a statement said. Visco’s first mandate expires at the end of the month.
Four ministers close to PD leader Matteo Renzi, who wanted Visco replaced, did not attend the Cabinet meeting in the latest sign of growing tensions within the ruling party.
Renzi had publicly urged Prime Minister Paolo Gentiloni to ditch Visco, saying under his stewardship the central bank had been a “weak point” in the oversight of the country’s financial sector.
Visco, 68, sits on the governing council of the European Central Bank and is considered a close ally of ECB President Mario Draghi — his predecessor at the Bank of Italy.
He has been attacked by parties of all political stripes following the collapse of 10 Italian banks over the past two years, and in a surprise move, Renzi tried to ambush his candidacy by tabling a critical motion in parliament last week.
However, Visco, who has blamed a prolonged economic turndown for the banking crisis, maintained the crucial backing of Gentiloni and Mattarella.
Renzi resigned as prime minister in December after losing a referendum on constitutional reform, to be replaced by Gentiloni, his former foreign minister. The clash over the Bank of Italy appointment was the first open sign of tension between them.
With a national election due by May next year, the problems at Italian banks have become a focal point of the political battle, casting a shadow over Visco’s reappointment.
The centre-left PD is in a three-way fight with the centre-right and the anti-establishment 5-Star Movement, polls show. Five-Star campaigned actively for Visco to go.
The absence of the PD ministers at Friday’s Cabinet meeting “was meant to mark the difference between Renzi and the government”, a government source said, suggesting the centre-left is descending further into disarray after a PD split earlier this year.
After the passage of a fiercely contested new electoral law on Thursday, the president of the Senate Piero Grasso quit the PD, saying he no longer shared Renzi’s vision for the party.