Despite being deeply concerned by Monte Paschi as long ago as 2009 and having specific and growing doubts about its operations and accounts, the BoI revealed that it did not summon the bank's management until late 2011, and took no sanctions until after the executives had stepped down last year.
If there was one man who should have been alert to the risks of opaque derivatives, it was Draghi, who was president of the Financial Stability Board, an international body charged with improving financial supervision and regulation. He was appointed to the job to prevent repetitions of disasters such as the collapse of US banks Bear Stearns and Lehman Brothers in 2008, in which derivatives played a key part.
"The Bank of Italy exercised neither deterrence nor repression on Monte Paschi", said former Economy Minister Giulio Tremonti, a long-time critic of Draghi who has set up his own party to contest Italy's national election next month. "For two or three years, nothing was done except the work of the prosecutors", he said, pointing out that the investigators unearthed wrongdoing and informed the central bank, rather than the other way round, as he said it should have been.
For now, Tremonti and Borghezio are exceptions, as few politicians see any capital in attacking the non-partisan chief of the ECB, which has bought Italy's government bonds and helped to save it from bankruptcy. But after a triumphant 2012 in which he won much praise for his steps to tackle the eurozone debt crisis, Monte Paschi is giving Draghi an uncomfortable new year.
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