Ground Floor: People generally don't like bankers. Bankers want to lend you money when you haven't asked for it while looking at you disdainfully when you haven't got a bean and you're suggesting that the overdraft limit could be raised just a little bit, writes Sheila O'Flanagan 

Meanwhile, central bankers, who most people assume are supposed to be keeping tabs on everything, are more concerned with making sure that the system doesn't collapse than ensuring it runs in the best interest of consumers. This is their job, after all, only not necessarily the job the man in the street thinks that they should be doing.

However the one thing about bankers is that they always stick together - or used to.

Italy's central bank governor, Antonio Fazio, (who, thanks to the ways and means of Italian banking is supposed to have a job for life, something most of us remember as a distant memory) had to leave a World Bank meeting last week after the Italian government said that he could no longer represent the country.

It was the most public humiliation yet for the banker, who has been under intense pressure for the past few months owing to his behaviour during the recent bid for Banca Antonveneta where ABN Amro, the Dutch bank, was in competition with Banca Popolare Italiana for ownership.

As an ex-central banker, who also received pay cheques from ABN (before the bank merged with Amro), I followed events with a good deal of interest during the summer. It has been the case that the Italian banking market was seen as a closed shop, virtually impossible for overseas banks to stage a takeover of an Italian counterpart. But the Italian market has a lot of potential, which has attracted overseas interest.

So, both ABN Amro and the Spanish bank BBVA launched bids for different Italian banks at around the same time.

Although the Bank of Italy had agreed that the bids were in line with Italy's takeover regulations, many observers wondered whether or not either bid would go through. Charlie

McCreevy, the EU's Single Market Commissioner, wrote to the Bank of Italy saying that the EU wouldn't tolerate attempts to block foreign bids for Italian banks.

However things didn't exactly go smoothly. ABN Amro's rival, Banca Popolare Italiana (BPI), was allowed by the Italian central bank to raise its stake in Antonveneta to almost 30 per cent.

This was partly done by BPI advancing loans to supportive clients in order for them to buy Antonveneta shares. There was consternation in the banking world at the actions of the central bank, and its chief inspector, Francesco Frasca, was placed under investigation for abuses of office. The Bank of Italy immediately issued a statement saying everyone there had acted correctly. However, taped conversations between the governor, Antonio Fazio, and the managing director of Banca Popolare, Gianpiero Fiorani, triggered unprecedented concerns in the EU and Italy about the process.

During one conversation in which Fazio said that he had approved BPI's bid, Fiorani thanked the central bank governor effusively, and said that he would kiss Fazio on the forehead if he could. He's the only one. Most of Fazio's advisers had voiced concerns about the viability of the BPI bid for Antonveneta and had drawn attention to irregularities in the process, but Fazio got the go ahead from outside consultants and made the fateful phone call.

The Italian government has been thrown into chaos because of the ensuing scandal. The central bank governor is meant to be impartial but those tapes seem to show otherwise, as they apparently include Fazio advising Fiorani on how to win the takeover battle.

The result was pressure from government ministers on Fazio to resign immediately. He retorted that he had acted properly throughout and had no intention of quitting. The heat was turned up when Italian finance minister, Domenico Siniscalo and deputy prime minister Giulio Tremonti called on Fazio to step aside.

Fazio ignored them and Siniscalco resigned, saying that he was "outraged" that Fazio hadn't been forced to quit. Tremonti took his place. Eventually, Silvio Berlusconi, the prime minister, who had previously said that the publication of the tapes was an invasion of privacy, added his voice to the calls for Fazio to do the honourable thing, suggesting that his continued presence as central bank governor was "not compatible with national credibility".

Fazio carried on regardless, until Giulio Tremonti revoked his authority to speak before the World Bank committee.

ABN Amro, showing true Dutch tenacity, finally completed the takeover of Atonveneta. It paid €26.50 per share and now owns just over 69 per cent of the bank. It has offered the same price for the balance of Antonveneta shares. BBVA, however, decided to give up on the Italian adventure.

The Italian cabinet has now proposed a package of reforms relating to the central bank, including a proviso that the governor may only serve for seven years. Domenico Siniscalo remarked that times were changing and that "even the Bank of Italy" had to change too.

Meanwhile, the ECB has denied that the Italian crisis might damage its own credibility. Fazio is on the governing board which sets monetary policy. IMF chief, Rodrigo Rato, has called for a speedy resolution to the crisis.

Siniscalo is right. Times have changed. Most institutions realised a long time ago that they were the losers if they allowed someone to stay on forever.

Sooner or later the incumbent thinks he or she is bigger than the post itself.

And it's the institution which suffers, as it has to deal with the mess. Nobody has a job for life any more. Not even central bankers.