however, there are opposing views. the public interest view which dates back to pigou ( 1938 ) contends that, by addressing market failures, governments regulate banks to facilitate their efficient functioning. 1 since banking crises impose significant social and economic costs, their prevention is often an explicit goal of public policy. the other view, often labelled the private interest view, accepts the presence of market failures, but conceives regulation as a product whose outcome is determined by the interplay between suppliers and demanders. 2 what this means is that different interest groups compete to a pigou ( 1938 ). the economics of welfare, 4th ed ( london : macmillan ). g. stigler ( 1971 ). “ the theory of economic regulation. ” bell journal of economics and management science 2, 3 – 21. bis central bankers ’ speeches influence policies towards banks in ways that favour their vested interests, even if those might be socially sub - optimal. in this context, it is interesting to observe that the importance of regulation was not lost on adam smith, arguably the greatest proponent of laissez faire, when he observed that : 3 such regulations may, no doubt, be considered as in some respect a violation of natural liberty. but those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments ; of the most free, as well as or the most despotical. the obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed. while there is evidence in support of both these views, the balance of argument is in favour of regulation which has been further reinforced by the recent global financial crisis. crisis and regulation before i delve into regulatory initiatives following the recent crisis, let me briefly touch upon the earlier initiatives following the asian crisis in the mid - 1990s. the basel core principles for effective banking supervision were expedited and initiatives such as the imf - world bank financial sector assessment program ( fsap ) took shape. the basel ii regulatory framework also saw the light of day. these international efforts were complemented by national initiatives at strengthening the supervisory architecture. the financial crisis that began in 2007 and morphed into a full - blown catastrophe with the collapse of lehmann brothers in 2008 served as a rude awakening as to how

: the two main lines of action are elimination of non - explicit price mechanisms and achievement of greater certainty on the terms applied in the supply of payment services. national legislation has to transpose the obligations laid down under these provisions with regard to “ two - leg ” transactions only, those in which both payment service providers ( if there are more than one ) are located within the eea. but italy has opted for broader scope, extending the transparency rules also to one - leg transactions in which only one of the service providers is located in the eea. the information requirements concern both the conditions of the service ( ex ante transparency ) and the effective execution of the transaction ( ex post transparency ). they vary with the nature of the payment service contract and the needs of the customer. a new category of payment service provider is also envisaged by the directive : the “ payment institution ”. this represents an opportunity for businesses with a network structure and extensive distribution channels, such as mobile phone operators and large retailers, who will be subjected to rules laid down by the oversight authorities to ensure adequate quality of payment services. it goes without saying that the new regime will benefit remittances. the bank of italy also monitors technological innovation in the remittances market. a study the bank is currently conducting on mobile payments has found that most operators are interested in developing new remittance payment services using mobile phones. in fact, in the emerging countries mobile phones are already being used successfully to transfer money internationally. in the opinion of the mobile phone operators interviewed, in the medium - tolong term it will be possible to deploy mobile payments applications for remittances on a large scale in italy as well. to conclude, a number of initiatives in both the regulatory environment and the market may have a significant impact on the remittances industry, increasing transparency and efficiency. the bank will continue to support these initiatives while monitoring the remittances market as part of its institutional mandate for oversight on the payment system, economic research and supervision of financial institutions. in view of the social and economic impact that remittances have on the everyday life of migrants and the increasing attention of the g8 authorities, we hope that along the lines of this italian initiative, and of those in other countries, remittance price databases will be introduced in many countries around the globe.