ROME, Dec. 19 (Xinhua) -- Bank of Italy Governor Ignazio Visco on Tuesday told a parliamentary commission of inquiry into the failure of several Italian banks that nobody in the government of ex-premier Matteo Renzi tried to exert undue pressure on him during the banking crisis.
Visco testified that Renzi asked him about Banca Etruria, one of four troubled lenders that were declared insolvent in 2015, restructured and sold off. "I told him I only talk to the finance minister about struggling banks," Visco told the commission.
Opposition parties including the populist Five Star Movement and the rightwing Brothers of Italy party claim Renzi and then Reforms Minister Maria Elena Boschi exerted undue pressure on the central bank over the crisis at Banca Etruria, where Boschi's father had been an executive.
ANSA news agency quoted Visco as saying that Boschi, who now serves as cabinet secretary, never made any improper requests of any kind.
The banking crisis was caused by "the worst recession Italy had experienced since 1960", Visco told the commission in televised testimony. "The extremely grave economic situation led pathological situations to explode," Visco said, adding there was "mismanagement at some banks".
Italian gross domestic product (GDP) contracted by seven percentage points and industrial production fell by 25 percent in 2007-2012, according to the Bank of Italy.
The banking sector had been a drag on Italy's economy for several years due to a collection of bad loans stemming from careless lending decisions and a long recession.
Deteriorated credit almost tripled from 4.5 percent at the end of 2007 to 12.3 percent of all bank loans by mid-2015, according to the Italian central bank.
On Twitter, Renzi thanked Visco for his testimony, which contradicts the claims of the opposition. "I thank Governor Visco for the words of appreciation for my government he expressed during the hearing," wrote the former premier, who stepped down in December 2016 and who is currently the leader of the ruling center-left Democratic Party. "I am pleased he has dispelled any doubts on the behavior of the cabinet members."
"No pressure has emerged, either on my part or on the part of (former minister) Boschi," Transportation Minister Graziano Delrio told reporters in televised comments. "It is legitimate for members of cabinet to ask questions about certain issues in order to form an opinion," he added.
At the beginning of 2017, the parliament approved a government bid to increase public debt by up to 20 billion euros to fund a rescue package for Monte dei Paschi di Siena (MPS) and other ailing banks.
The European Union on Dec. 29, 2016, approved the Italian government's move to rescue MPS, the country's third-largest lender and the world's oldest bank.
While the Renzi government's intervention averted what could have been a system-wide banking meltdown, the measures were unpopular because many small investors lost their life savings in the failure of the rescued banks.
The opposition Five Star Movement has been very vocal in its condemnation of Renzi and Boschi over the banking crisis.
The populist movement is currently polling as Italy's number one party at upwards of 27 percent and it campaigns on an anti-corruption, anti-establishment platform.
Italy's political parties are gearing up ahead of the next general election, to be held in early 2018.
