The governor of the Bank of Italy hit out on Tuesday at government plans to give local officials a role in monitoring lending by Italian banks, which had infuriated bankers and created a rift between the central bank and the finance ministry.

Mario Draghi told the Italian parliament a finance ministry initiative to allow state-appointed provincial officials, known as prefects, a say in how banks lend in the economic downturn would make the decisions dependent on local political criteria and undermine banks’ independent credit policies.