Contrary to what Italian Prime Minister Silvio Berlusconi might have you believe, the European Central Bank has no formal role to play in whether besieged Bank of Italy Governor Antonio Fazio keeps his job.
Mr Fazio has resisted pressure to resign since July over accusations he discriminated against foreign banks in a takeover battle, with several government ministers, including Economy Minister Domenico Siniscalco, calling on him to step down.
However, Mr Berlusconi, faced with a divided coalition, last week washed his hands of the affair and attempted to bat the ball into the ECB's court.
"The Bank of Italy is autonomous and independent. Only the ECB can intervene from this point of view. I think the government should not do anything more," he said yesterday.
Mr Berlusconi's words prompted a barrage of questions to ECB President Jean-Claude Trichet in recent days over how the bank would deal with Mr Fazio.
However, the ECB cannot fire a central bank governor under any circumstances, and the bank's statute is geared towards defending governors from political attack rather than forcing out governors whose own national governments show no desire to remove them.
The statute says governors can only be dismissed in the case of "serious misconduct" or if they are medically unfit to perform their duties. This means the ECB would defend governors from dismissal in any case other than these, not that the ECB itself can remove them.
Similarly, establishing whether serious misconduct has taken place is not the ECB's job but that of the relevant national authority and, if the governor contested his dismissal, the European Court of Justice.
Mr Trichet has been even-handed in his comments, stressing that the ECB favours an integrated financial market with no discrimination against mergers on the basis of nationality, but also underlining the importance of central bank independence.
For Italy to try to get rid of Mr Fazio by changing the law would be "a catastrophic precedent for the independence of all central banks," he told the European Parliament on Wednesday.
He also appeared to indicate that Mr Fazio should stay in place for at least five more years if Italy replaces his currently open ended mandate with a fixed term one.
Asked by reporters how long Mr Fazio should remain in office after a change in Italian law, Mr Trichet made reference to the ECB's founding statutes. "The reference is in the treaty, the treaty mentions five years," he said.
The ECB's role in the Fazio affair would be limited to one of moral persuasion, if it believed it was appropriate.
There would be nothing to stop Mr Trichet issuing a statement saying the governing council believed Mr Fazio had improperly favoured Banca Popolare Italiana against Dutch lender ABN AMRO in its battle for control of Banca Antonveneta. However, many ECB-watchers believe it is extremely doubtful that the 18-man council would even try to reach a consensus on such a complex and delicate issue, especially since Mr Fazio has still not been formally charged with any wrongdoing.
One senior European monetary source told Reuters off the record this week that the problem was strictly an Italian one and was not for the ECB to deal with.
The only body which formally has the power to fire Mr Fazio is the BOI's superior council, made up of prominent figures from business, academia and the legal profession, which can revoke his mandate by a two-thirds majority of its 13 members.
Mr Siniscalco is reportedly lobbying the council, but most of its members were appointed by Mr Fazio. Italian newspapers, as well as Mr Fazio's supporters, say it is highly unlikely to turn against him.