Berlusconi picks Bini Smaghi for central bank

European Central Bank executive board member Lorenzo Bini Smaghi has been selected to be the new governor of the Bank of Italy, the Financial Times reported in its Thursday edition. The selection of a replacement for current chief Mario Draghi, who is leaving to become president of the ECB from next month, has sparked fierce rows within Prime Minister Silvio Berlusconi's increasingly fraught coalition. Berlusconi has said he will announce his nomination for governor on Thursday in a letter to the governing council of the central bank, which has to respond officially with its view on the nomination although it has no veto power. The Financial Times quoted unnamed sources for its report. Contacted by AFP, a spokesman for Berlusconi declined to comment and the prime minister told reporters earlier that the nomination would be secret until the contents of his letter to the central bank were made public. Berlusconi's preferred choice is believed to be the central bank's current number two Fabrizio Saccomanni, while Finance Minister Giulio Tremonti has reportedly been pushing for Treasury director general Vittorio Grilli.