The View from Bologna

What does it profit a man? Religious subtexts in the Fazio case.

"I won't finish in hell, but I'll do a thousand years in purgatory," banker Giampiero Fiorani joked about himself. A strangely religious outlook for a banker, one might think, particularly when faced with the more pressing concerns of avoiding a possible jail sentence. Fiorani is currently under investigation by the Milan magistrature for a number of suggested irregularities, such as false accounting, some of which impinge upon the controversial attempt by his bank, Banca Popolare Italiana, to take over the Banca Antonveneta SpA in the face of competition from Dutch bank ABN Amro.

Of course banking and religion are historically uncomfortable but constant bed partners. The Knights Templar gained both influence an notoriety partly due to their proto-banking system, whereby they arranged credit transfers from Northern Europe to Palestine for arriving and returning crusaders. During the Renaissance, the Vatican regularly blessed financial support from bankers such as the Medici family. Historical associations, cemented in Italy visibly by the fact that so many banks carry saints' name (including the ill-fated Banco Ambrosiano, named after Milan's patron saint). Historical associations, you might say. Not particularly relevant in the 21st century.

For weeks now the complicated affair surrounding the take over of the Banca Antonveneta SpA has dominated the Italian press and TV. Daily calls have come from various quarters for the Governor of the Bank of Italy, Antonio Fazio, to resign. The reason? Because leaked tapes of phone conversations have revealed a close connection between Fazio, his wife, and our aforementioned banker Fiorani. Fazio, as Governor, has within his gift the power to authorize bank take overs. Despite the advice of his bank staff, and the seemingly stronger position of ABN Amro, Fazio authorized the take over in favour of Fiorani's group BPI. In a telephone conversation, when Fazio broke this news to Fiorani, the purgatory bound banker™ (p.b.b) replied "I'll kiss you on the forehead", in thanks. No-one has thus far suggested that Fazio has acted illegaly. He worked within the rules, it would seem, but, as EU commissioner Charlie McCreevy pointed out, one can follow the rules without following the spirit of the rules.

On the face of it, the affair is one where the Bank of Italy favoured an Italian bank over stonger foreign rivals. A level beneath national protectionism is the fact that Governor Fazio and Fiorani are friends, and Fazio's adjudication on the takeover favoured the p.b.b.
As if this mix of economic nationalism and conflict of interest weren't enough, the latest addition to the controversy has been religion.

At first it was introduced subtly. It's no secret that Governor Fazio is a devout and pious Catholic. So too is Fioriani, according to La Repubblica. So too are many Italians, you might well point out. So when L'Osservatore Romano, the Vatican's newspaper, published a staunch defense of the Governor, claiming that a political lynching was underway and that "faith has nothing to do with it", it would have been unfair to read too much into it [though the expression 'the lady doth protest too much' did spring to mind].

It took the government party Forza Italia's spokesman on credit, Guido Crosetto, to move the subtext into the headlines. In an interview with the newspaper Libero, he commented about the affair that Italian banks "look tempting to many, especially the hordes of Jewish and American Freemasons that are already at the gates". He continued to suggest that various Italian politicians, such as Romano Prodi (Berlusconi's likely opponent in next year's elections) are in league with the infernal forces of masonic finance. According to a scathing editorial in the Corriere della Sera, Crosetto then went on to give a specific example, Merril Lynch "whose shareholders are [...] specifically Jewish".

This type of language, as the Corriere points out, is far too reminiscent of the 1930s for comfort. Forza Italia leader Silvio Berlusconi, himself a one-time lodge member of P2, a masonic group intent on overthrowing the Italian State, took umbrage at the very idea that Forza Italia could be considered a racist party because of Crosetto's comments. They were "unfortunate", but how could anyone accuse his party of being anti-semitic. His government is, after all, one of Israel's best friends.

Last year this Monkey went to one of Italy's leading banks to witness the spectacle of someone trying to set up a direct debit. Blank faces, colleague conferences, and scratched heads greeted us while the staff tried to work out how this would be done. Approx. 40mins later, we had managed to explain the concept and suggest how it could be done. The bank staff looked sceptical, and later amazed when finally a footnote in procedure was found confirming the possibility of such an outlandish transaction.

Rather than subscribing to medieval paranoia in the face of European competition, Crosetto and Forza Italia would be better served by ensuring that Italian banks actually provide a competitive service to their customers. Or should Italian customers be consoled by the fact that the virtual monopoly, conflicts of interest, high prices and poor service, bad as they may be, at least come from the devout and Italian?

Posted by 3Monkeys at September 17, 2005 05:27 PM

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