Events at the two former popolari banks came to the public’s attention when there were new reports of inquiries launched by the judiciary, with which the Bank of Italy had been cooperating for some time. In the debate that ensued the Bank of Italy’s actions were repeatedly called into question, often based on mistaken premises or fundamental misunderstandings.
Pure discretion has acquired a bad name because, at least in countries with nonindependent central banks, it is seen as a cloak for politically-motivated decisions. Such decisions have sometimes been a crude attempt to buy votes by easing of monetary policy before elections, the benefits of monetary relaxation coming relatively quickly and the costs of higher inflation emerging only later.