The Italian Government Proposes Panetta As The Next Head Of The Bank Of Italy

According to the sources, the incumbent governor, Ignazio Visco, will remain in office until the end of October, when his term expires.

The government plays a crucial role in the appointment of the head of the Bank of Italy, which is governed by a complex procedure involving consultation with the central bank's principal internal body and the approval of the chief of state.

The Superior Council of the Bank of Italy authorised Panetta's candidature last week, according to a third source with knowledge of the situation.

Panetta, 63, spent over three decades at Italy's central bank and served as deputy governor under Visco before being appointed to the ECB's board in Frankfurt at the beginning of 2020.

Although his term in Frankfurt was not set to expire until the end of 2027, he was widely anticipated to succeed Visco.

Similar to Visco, who has been governor since 2011, he is perceived as a fiscal moderate.

Panetta's departure will create a vacancy on the six-member ECB board, which has always included representatives of the euro zone's three largest economies -- Germany, France, and Italy -- although there is no rule mandating this.

An ECB spokesperson declined to comment.

The third source indicated that Piero Cipollone, a member of the five-member executive board of the Bank of Italy, was the leading candidate to succeed Panetta in Frankfurt.

Cipollone, who entered the Bank of Italy in 1993, has also worked for the World Bank and was the former Italian prime minister Giuseppe Conte's economic adviser from 2018 to 2019.

Governors of the Bank of Italy play a significant role in the country's economic administration, and some have moved on to larger positions.

After leaving the central bank in the 1990s, Carlo Azeglio Ciampi became prime minister and then president, while Mario Draghi became head of the European Central Bank and then prime minister until last year.

In 2022, Panetta declined an offer to serve as finance minister in the new right-wing government of Prime Minister Giorgia Meloni, but he managed to maintain cordial relations with her administration.