Italy's economy minister last night called for sweeping reform of the way the country's financial markets are regulated after the Parmalat crisis and accused the Bank of Italy of failing to protect investors.
"The Bank of Italy perhaps ought to have noticed in course of the years and in the course of its inspections that something was at least anomalous," Mr Giulio Tremonti told lawmakers at a first parliamentary hearing on Parmalat.
Parmalat's multibillion-euro accounting scandal, which US regulators have dubbed one of the most brazen corporate frauds in history, followed other company collapses in Italy, shaking investor faith in the country.
"The crisis is not industrial but financial, the only solution is an organic reform. In any case, we do not have much time," the minister told the hearing.
Under the reforms mapped out by Mr Tremonti, the Bank of Italy looks set to lose its power over bank mergers and financial instruments - a blow to bank governor Mr Antonio Fazio, who has ruled over the Italian banking sector for a decade.
Besides his criticism of the central bank, Mr Tremonti said market regulator Consob, which is widely considered toothless, had been "insufficient" in its controls on Parmalat up until the first half of 2003 but had then proved more dynamic.
Mr Tremonti also criticised the high street banks, accusing them of passing excessive credit risk to retail investors by selling them bonds in struggling companies. He added businessmen should not sit on bank boards.