Bank of Italy Governor Antonio Fazio defended himself on Friday from accusations of bias in a takeover battle for a local bank, saying he had always "scrupulously" followed EU and Italian laws in the affair.
In his first comments since the scandal broke last month, Fazio presented his case to a government committee and denied charges that he had favoured Banca Popolare Italiana in its bid to buy local lender Banca Antonveneta.
"The Bank of Italy has scrupulously followed the norms of EU and Italian regulations," Fazio said at the end of a 24 page report which was later released to the press.
Fazio's three-hour address was welcomed by at least some of the ministers and the government will decide on its next steps at a cabinet meeting called for September 2.
"At this point I would rule out any direct or indirect action on the part of the government," said Labour Minister Roberto Maroni, who has proved a staunch defender of Fazio throughout the crisis.
Fazio, who has faced widespread calls for his resignation, made no direct reference to calls for a reform of the Bank of Italy in his report on Friday and insisted that he would continue to regulate the Italian financial sector.
Some members of Prime Minister Silvio Berlusconi's centre-right government had called on the bank to put forward its own reform plan, but Fazio appeared to indicate that it should be up to parliament to decide on the issue.
"In rigorous respect of the powers and organs of state, starting with parliament, which we will follow with great attention, we believe a detailed knowledge of the Bank of Italy's actions will help in the understanding of its linear operations," Fazio said.
Fazio's many critics say he openly favoured BPI's bid at the expense of a bid by Dutch bank ABN Amro, undermining his role as supreme arbiter of Italy's financial sector and strengthening a widely-held view that foreigners seeking to invest here often get a raw deal.
Fazio not only overruled the central bank's own advisers to approve the BPI bid but was also in regular contact with BPI's CEO about how to proceed with the deal, according to wiretaps by magistrates who were investigating BPI's finances.