Power of Governors

One of the highest public figures in Germany ended his career because he accepted a 7600 EUR gift, a three-day lodging in a luxury hotel in Berlin, which had been paid by a German Bank.

This was enough for the media and public opinion in Germany to start forcing him to resign from a post that he had been keeping for years. Welteke’s is not the only case when a Governor is involved in a scandal.

One year later, Antonio Fazio, Governor of the Bank of Italy had the same end, after leading the Bank for 12 years. Fazio was involved in a scandal related to suspicious financial transactions for the purchase of the Antonveneta Bank shares.

Fazio resigned and was sentenced to 2.5 years in prison by the Supreme Court. The then Minister of Economy proposed a series of reforms to limit the superpower of bank governors. Their time on duty was reduced to six years and the suspension procedures were made easier, giving more power to the government.

Then it was the Governor of the Bank of Switzerland, Filip Hilderbrand. His wife has bought 500.000 in the exchange market three weeks before the bank led by her husband decided to make the Franc weaker towards dollar.

The former governor declared that he was not aware of the transaction, but that was enough for the Swiss public opinion to ask his resignation, which came only one week later.

Bank Governors have many powers, but different from others, their post doesn’t come from the citizens’ vote, that’s why the sensitivity of the public is higher, since governors shpould stay far from political and financial scandals.

They are very significant, because in the USA, even news about the Governor’s health might cause fluctuations in the stock market.

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