The Bank of Italy’s functional and governance arrangements are based on a variety of different legal sources: Community law, which regulates the activity of the European System of Central Banks (ESCB), the provisions of banking and financial law concerning its supervisory powers, other provisions governing its relations with the Ministry for the Economy and Finance and other authorities, and its Statute. Within the Eurosystem, of which it is an integral part, the Bank contributes to monetary policy decisions through the participation of the Governor in the Governing Council of the European Central Bank and of its experts in the Eurosystem committees and working groups that perform the necessary technical analysis. It performs these functions under Article 105 of the EC Treaty and Article 3 of the Statute of the European System of Central Banks. At national level, an indirect reference to the Bank’s functions can be found in Article 47(1) of the Constitution, which provides for the protection of savings (“The Republic encourages and protects saving in all its forms, it regulates, coordinates and controls the provision of credit”).
The institution was established in 1893 from the combination of three major banks in Italy (after the Banca Romana scandal). The new central bank first issued bank-notes during 1926. Until 1928, it was directed by a general manager, after this time instead by a governor elected by an internal commission of managers, with a decree from the President of the Italian Republic, for a term of seven years.
After the charge of monetary and exchange rate policies was shifted in 1998 to the European Central Bank, within the European institutional framework, the bank implements the decisions, issues euro banknotes and withdraws and destroys worn pieces.
The main function has thus become banking and financial supervision. The objective is to ensure the stability and efficiency of the system and compliance to rules and regulations; the bank pursues it through secondary legislation, controls and cooperation with governmental authorities.
Following reform in 2005, which was prompted by takeover scandals, the bank has lost exclusive antitrust authority in the credit sector, which is now shared with the Italian Competition Authority (Italian: Autorità Garante della Concorrenza e del Mercato).
Other functions include, market supervision, oversight of the payment system and provision of settlement services, State treasury service, Central Credit Register, economic analysis and institutional consultancy.
Bank of Italy gold reserves are 2,451.8 tonnes (2006).See more