European Central Bank chief Mario Draghi on Thursday defended his record when he was governor of the Bank of Italy over the handling of finance scandals at troubled lender Monte dei Paschi di Siena, the world's oldest bank founded in 1472.
"The Bank of Italy has done everything it should and appropriately and in time," Draghi said at a press conference in Frankfurt.
"I don't want to take sides on the Italian elections but you should certainly discount much of what you hear and read," he said.
The European top banker also said the bank must "follow through on its restructuring plans in order to restore its health and profitability".
The bank, Italy's third largest, meanwhile insisted there were no more skeletons in its closets, a day after admitting losses linked to risky investments totalling 730 million euros ($989 million).
"We have wound up our financial portfolio review. There are no other 'Santorini'," Fabrizio Viola, director general of the world's oldest bank, said in a conference call in reference to one of three derivative trades which have plunged the institution into scandal.
The group announced on Wednesday that an investigation had uncovered accounting errors in three derivatives: a 2006 trade with J.P. Morgan nicknamed "Nota Italia", a "Santorini" trade with Deutsche Bank two years later, and one in 2009 with Nomura known as "Alexandria".
The losses, which would weigh on the bank's 2012 results, could total 730 million euros, it said.
"Right now, I hope the attention (focused on the bank) drops back to zero," said Viola, as the 540-year old institution tries to shake off a drama which has rocked the Tuscan town of Siena, where the bank is the primary sponsor for many social welfare services and university and sporting events, including the famous "palio" horse race.
Viola denied recent rumours that BMPS could merge with one of its peers -- both Deutsche Bank and BNP Paribas had been tipped as possible partners.
"I am not allowing myself to be distracted by articles talking of marriage. Today, there is nothing at all" planned, he said.
The scandal, which broke after reports in the media last month, sparked a probe into former top officials of the bank, Italy's third-biggest, which also raised questions over the relationship between politicians and financial institutions in the run up to February's 24 and 25 general elections.
Prosecutors launched legal proceedings into the bank after media revealed that hundreds of millions of euros were missing from BMPS's accounts after risky investments in complex financial products.
According to local media, BMPS directors tried to conceal the losses.
The investigation also centres on the bank's 2007 acquisition of Antonveneta from Spanish banking group Santander for 10 billion euros, at least 2.0 billion euros more than the small bank's estimated value at the time.
Accusations range from conspiracy to fraud, including the provision of false information and preventing proper oversight by banking authorities.
The media revelations emerged just as Italy's government granted a 3.9-billion-euro bailout to BMPS, which was hit hard by the eurozone debt crisis and reported a net loss of 1.664 billion euros in the first nine months of 2012.
A request from consumer association Codacons to block the loan as a preventive measure was rejected by Rome's administrative tribunal (TAR) on Saturday in a provisional decision.
Codacons, which has also called for Bank of Italy Governor Ignazio Visco to step down, claims the Bank of Italy was not transparent in granting the bailout and has said it will lodge a complaint that the central bank violated EU rules on state aid.
The Bank of Italy has, in turn, called Codacons' complaint "unfounded" and has asked for TAR to fine it. A new hearing has been set for February 20.
Also in the legal case linked to BMPS, Rome prosecutors have opened an investigation regarding market manipulation and obstructing the work of banking watchdogs.