The head of the Italian Banking Association has resigned after being accused of signing murky derivatives deals when he was at the helm of the Monte dei Paschi di Siena (MPS), the country's third-largest bank.
Giuseppe Mussari, 50, tendered his resignation late on Tuesday. He led MPS from 2006 to 2012.
MPS failed to meet European capital requirements in June, and is due to be bailed out by the Italian government with loans totaling 3.9 billion euros (5.2 billion dollars).
Last week Bloomberg reported that on a derivatives deal it struck with Deutsche Bank to hide losses on its 2008 accounts. Italian newspaper Il Fatto Quotidiano revealed Tuesday another derivatives deal with Japanese bank Nomura to massage 2009 accounts.
"I take this decision convinced to have always acted in respect of our laws, but at the same time, I am determined not to bring any damage - even indirectly - to the association," Mussari wrote in his resignation letter, published by the Corriere Della Sera daily.
Trading in MPS shares on the Milan stock exchange was suspended on Wednesday after a fall of 9 per cent. On Tuesday shares had lost 5.68 per cent.
On Monday, before Mussari announced his resignation, the bank's management had called a special shareholders' meeting for Friday.
Corriere della Sera noted that the scandal is an embarrassment for the centre-left Democratic Party (PD), the frontrunner in the elections slated for February 24-25. MPS is indirectly controlled by the local municipality of Siena, ruled by a PD administration.