Mario Monti, Italy's prime minister, was forced to offer to recall parliament on Thursday amid questions about his government's handling of the financial crisis at Monte dei Paschi di Siena and the role of the central bank.
Shares in Italy's third-largest bank by assets, which has requested a second state bailout in four years, have fallen more than 22 per cent in the past few days since revelations five days ago of derivatives transactions that may force the 500-year-old bank to restate hundreds of millions of euros of losses.
Supervision of the struggling institution by the Bank of Italy while Mario Draghi, European Central Bank president, was governor has come under attack as an increasingly fierce political outcry erupts in the run-up to national elections next month.
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Among the most vocal criticisms of the central bank, which traditionally has oversight of the Italian banking system, was Mr Draghi's long-time rival Giulio Tremonti, the former finance minister who is again running for office on February 25 for the centre-right.
"In this specific case it is strange that the supervision was not preventive," Mr Tremonti said.
In a sign of the severity of the situation, Giorgio Napolitano, Italy's head of state, made a rare entry into the financial arena. "If the situation is serious we are right to be concerned but I have full confidence in the operations of the Bank of Italy," he told reporters.
In a statement released late on Wednesday, the central bank said Monte dei Paschi had "hidden" information on the derivatives transactions struck between 2006 and 2009, a period during which Mr Draghi was governor.
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The Bank of Italy said the "true nature" of some of the deals emerged only recently, "following the discovery of documents kept hidden from the supervisory authority and brought to light by the new management of MPS."
It added supervisory and judicial authorities were investigating the transactions.
The ECB told the Financial Times that it was a matter for the Italian authorities and declined to comment.