May 28, 2012 / 7:48 PM / 7 years ago

Court cuts jail sentence of ex-Bank of Italy boss

MILAN (Reuters) - An appeals court sentenced former Bank of Italy governor Antonio Fazio to two-and-a-half years in jail on Monday for trying to thwart a foreign takeover of local lender Banca Antonventa in 2005, a scandal that led to his exit from the central bank.

Former Bank of Italy Governor Antonio Fazio smiles after he attended Pope's Benedict XVI general audience in St. Peter's square at the Vatican December 21, 2005. REUTERS/Alessia Pierdomenico

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

Fazio, who took the helm of the Bank of Italy in 1993, was forced to quit at the end of 2005 after wire-tapping transcripts showed him favoring 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 (BMPS.MI).

Fazio will appeal the sentence, his lawyer told Reuters.

“It’s obvious that we will appeal. The verdict is disappointing,” lawyer Franco Coppi said.

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

As governor of the Italian central bank, he was responsible for overseeing the country’s banking system.

The departure of Fazio, who was replaced in 2005 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.

Monte dei Paschi’s buy of Antonveneta at the peak of the market is now under scrutiny in a different case aimed at assessing whether the Tuscan bank misled regulators at the time of the purchase of Antonveneta from Spain’s Santander (SAN.MC).

In a separate court case also relating to a 2005 cross-border takeover row, Fazio was sentenced to three-and-a-half years for market-rigging over Banca Nazionale del Lavoro, the target of a bitter battle between mid-sized local insurer Unipol (UNPI.MI) and Spanish bank heavyweight BBVA (BBVA.MC).

Additional reporting and writing by Lisa Jucca; Editing by Mark Heinrich

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