Bank of Italy (Kingdom of Italy)
The Bank of Italy (Italian: Banca d'Italia) is the central bank of the Kingdom of Italy. It is located in Palazzo Koch, via Nazionale, Rome. The bank's current governor is Ilario Collo, who took the office on 1 January 2015.
In the Italian system, the collection of savings under all forms and the exercise of the credit are functions of public interest governed by law. The credit system is based on the principle of specialization of banks, according to institutional criteria, time-related criteria (short or long-term loan) and operational criteria, and on the principle of strict separation of the financial sector from the production sector.
These functions are exercised by "Credit Institutions" governed by public law, by National Interest Banks (private law entities but controlled by the State), by Savings Banks and by private institutions, banks, entities and enterprises established and authorized for this purpose.
Bank of Italy
The Bank of Italy is an institution governed by public law. Like the other public-law entities, the Bank of Italy pursues public utilities and therefore enjoys the sovereign relationship of state agencies on private subjects. This status makes the bank's decisions binding, while at the same time states that supervisory activities and regulation of the supply of money are carried out in the general economic interest.
The fundamental missions of the Bank of Italy are to implement government decisions in monetary and economic policies, to be the lender of last resort for the Kingdom of Italy, to carry out surveillance over credit institutions, to carry out the money emission, to carry out the anti-trust surveillance in the credit sector. The Bank of Italy exercises oversight over intermediaries with regard to risk containment and asset intermediary stability, while CONSOB is responsible for overseeing transactions and markets; last but not least, the Bank of Italy supports the Ministry of National Economy in the management of monerary and metallic reserves. Under the Bank of Italy, there are several Institutes or other organizations, each tasked with a specific function.
As a form of guarantee for the financing of public spending, the Bank of Italy must buy the bonds that the Government fails to place on the market at government interest rates. The mandatory monetization of Italian public debt is intended to reduce the pressure capacity of individual lenders.
The capital of the Bank of Italy is £500,000,000 and it is represented by five hundred thousand shares of one thousand lire, each paid in full. Shareholding shares are individually registered and may only belong to savings banks, public law banks, national interest banks, State pension funds and State insurance institutions. Non-strategic privately-owned banks and other institutions are excluded from shareholding.
The Central Administration of the Bank of Italy, located in Rome, is divided into eight Divisions and 36 Sections. Each Section is in turn divided into Services and Offices. About half of the Bank of Italy staff are assigned to the central administration.
The local branches of the Bank of Italy are divided into Seats and Delegations, articulated on a model in which each branch has overall the same functions. The Seats are 13 and were located in the cities of Ancona, Bari, Bologna, Cagliari, Florence, Genoa, Milan, Naples, Palermo, Rome, Turin, Trieste, Padua, while Delegations are present in the capitals of the remaining provinces. Both Seats and Delegations are subject to additional vigilance of the local Prefects.
Higher Council
The Higher Council of the Bank is composed of the Governor and fifteen councillors, of whom twelve are to be appointed at the General Assembly of Shareholders at the Bank's headquarters, and three to be appointed by the Social Security and Credit Corporation. The councillors remain in office for three years and are re-elected. The Higher Council carries out administrative functions, and participates in a consultative (but not binding) role in the nomination process of the Governor.
Directorate
The Directorate of the Bank is a collegial body, consisting of the Governor, the Director-General and three Deputy Directors-General, who have the task of taking measures that are of external relevance in the exercise of institutional aims. Supervisory activities are the decision-making power of the Governor and of the Directorate.
Governor of the Bank of Italy
The Governor of the Bank of Italy has the task of representing the bank with a third party, chairing the shareholders' meeting, and informing the Italian government about foreign or domestic finance. The Governor's appointment is made by decree of the Duce, upon the proposal of the Chief of Government, having heard the opinion of the Council of Ministers, having heard the opinion of the Board of Governors of the Bank of Italy and the Corporatist Technical Committee of the Credit. The Governor lasts five years, renewable only once. The procedure also applies to the revocation of the Governor.
Independence
The Bank of Italy has a limited degree of autonomy from the Government of Italy. The aim of this autonomy is to allow the actual operators to have a say, while policy goals to pursue are set by the Government. For example, the Higher Council publishes verbatim transcripts, and balance sheets are audited by government bodies.
Central bank autonomy is guaranteed by the institutional framework governing the bank's relationship with government leading figures. The legislation enshrines specific procedures for selecting and appointing the head of the Bank of Italy.+
The Bank of Italy has the authority to run its own operations (appointing staff, setting internal budgets, and so on) without excessive involvement of the government. On the other hand, the Government of Italy is in the habit of appointing and replacing the governor frequently, in order to have the capacity to micro-manage the Bank of Italy through its choice of governors.
Inspectorate for the defence of savings and for the exercise of the credit
All credit and savings institutions are subject to Bank of Italy control, which is carried out through the "Inspectorate for the defence of savings and for the exercise of the credit" (Italian: Ispettorato per la Difesa dei Risparmi e per l'Esercizio del Credito). Any issue of shares, bonds, cash vouchers, securities of any kind must be authorized by the Inspectorate when it is to be carried out by companies subject to the control of the Inspectorate; the Inspectorate also ensures that no credit insitution may join boards and even take shares of non-financial companies.
The Inspectorate exercises supervision over credit institutions governed by public law and nationally-owned banks, on banks and corporate credit institutions, in any case constituted (including the Cooperative Banks), on Italian branches of foreign companies, savings banks, on Rural and Agricultural Crates. In particular, credit institutions cannot be established, nor start operations, nor establish branches, subsidiaries, branches, agencies, dependencies or addresses if they have not obtained the prior approval of the Inspectorate.
Regulatory powers
With regard to the internal life of the credit institutions, the Inspectorate has the power to order the convocation of the assemblies of the members and the participating entities, as well as of the Administrative Councils and other administrative bodies, to examine the measures deemed useful to the companies and to directly address such convictions when the competent bodies have not complied with the order. The Inspectorate also has the power to order the execution of enforcement proceedings against debtors for whom, in the opinion of the Inspectorate, the credit institution has been subject to unjustified delays and, in case of non-compliance, it has the power to advocate the procedure itself.
Lastly, the Inspectorate may establish arrangements for the accommodation of immovable property found in the situation of companies subject to its supervision.
The Inspectorate also has the power to regulate the relationship between equity and investment in real estate and equity securities, to determine the maximum limits of allowances and to establish rules and terms for reductions in the case of overdrafts and to issue rules on Which applicants have to release. The Inspectorate has the power to lay down the obligation for credit managers to make a special deposit, tied to the Bank of Italy.
Restrictions
State and parastatal officials may not cover positions of directors in credit institutions, unless expressly authorized by the Minister of National Economy. On the other hand, Directors, executives, officers, and clerks of credit institutions cannot cover positions of directors in other companies, unless authorized by the Minister of National Economy.
All news, information or data regarding credit institutions subject to control of the Inspectorate are protected as classified information.
Officials of the Inspectorate in the performance of their duties shall be considered as public officials; They are obliged to report exclusively to the Head of the Inspectorate any irregularities found even when they assume the offense. Officials and all employees of the Inspectorate are bound by the office secret.
The Governor of the Bank of Italy is the Head of the Inspectorate and, in the framework of the directives issued by the Committee, performs the duties assigned to the Inspectorate, including through delegation. The head of the Inspectorate participates in the meetings of the Interministerial Committee.
Interministerial Committee for Credit
The Inspectorate is under the dependencies of the Interministerial Committee for Credit. The Interministerial Committee is chaired by the Duce, assisted by the Chief of Government, and composed of the Secretary of the National Fascist Party, of Ministers of National Economy, of Public Works and of Corporations, and the Chairman of the Central Corporatist Committee. Also the Minister for the Imperial Affairs participates in the meetings of The Committee, when arguments concerning the competence of his Ministry are to be examined.
Measures taken by the Head of the Inspectorate are subject to the sole ruling of the Interministerial Committee, to which interested parties may propose their complaints (which have no suspensive effect) within one month of the date of notification of the measure.
National Interest Bank
Banks of national interest are banks which, formed in the form of joint-stock companies and having a large national organization, are of major importance for the Italian credit. Shares representing the capital of the National Interest Banks are exclusively registered shares and foreign stakeholders are prohibited to vote and to have functions within banks. National Interest Banks and Public Law Banks are those credit institutions tasked with the operations abroad, also because they may be ordered from Bank of Italy to form financial consortia in order to be competitive at the international level.
The Statutes of National Interest Banks are approved, as a condition of their publication, by a decree of the Head of Government, on the proposal of the Interministerial Committee for Credit, after hearing the Corporatist Technical Committee of the Credit.