. finally, in accordance with the law ’ s purpose, the draft proposes that interest be calculated only once a year and not quarterly, as is the usual practice. the consultation document envisages that the resolution be applied only after it enters into force, in accordance with general legal principles. it does not take a position on how the law should be applied prior to action by the credit committee. we hope for clear guidance on bis central bankers ’ speeches this delicate issue, which will continue to be evaluated in light of the case law, in order to ensure certainty in the law and in banking transactions. the consultation was concluded a few days ago. we received numerous comments from an ample cross - section of participants. we will analyse them carefully and consider the suggestions for improving the text to be submitted to the credit committee. 2. savings and the management of banking crises starting next year the new european banking crisis resolution system will be fully operational with the transposition of the eu bank recovery and resolution directive ( brrd ). the system forms part of the broader process of reforming international financial rules to reduce the probability and the impact of bank failures by strengthening capital requirements, setting limits on financial leverage and instituting new minimum liquidity ratios. banks deemed to be systemically important are subject to additional safeguards, and further measures are being discussed at the international level. it must be understood that the new rules will tend to diminish both the profitability and the size of banking systems, shifting a portion of the financing of the real economy to the capital market and increasing the relative importance within the credit market of institutional investors other than banks. in italy, a shift of this kind in the financial system has long been desirable to accompany the transition of the economy towards a more modern structure, with less bank debt and more equity and bond issues. under the new european system the single resolution board and the national resolution authorities will be responsible for handling bank crises, with a division of competences that takes account of the type of intermediary involved and the possible need for recourse to the single resolution fund. the bank of italy, designated as the national resolution authority, has created a special unit that reports directly to the governing board and is independent of the directorate general for financial supervision and regulation, as required by european legislation. the european regulatory framework envisages a variety of tools to help failing banks restructure or exit from the market without interrupting the provision of critical functions and jeopardizing the overall stability

2 per cent of their outstanding bad debt ). in the early months of this year, the sales continued to be for small amounts. for the most part the transactions involved the major groups and foreign banks operating in italy. the smallness of the transactions to date can be ascribed to information asymmetry between buyers and sellers relating to poor data management at many banks and the objective difficulty of assessing the conditions of many indebted small businesses. public intervention, obviously in compliance with the regulations bis central bankers ’ speeches on state aid, could facilitate the development of this market, serving as a catalyst for private sector initiatives. while the discussion continues on this matter between the italian government, assisted by the bank of italy, and the european commission, further studies are being conducted to ascertain the actual interest of both potential investors and banks in a company to purchase and manage impaired assets, operating at market conditions. public participation in this asset management company would be marginal or nil ; there could be a state guarantee for the senior liabilities it issues to finance its asset purchases. over the next few weeks the feasibility of the project will be definitively determined. regardless of the outcome of the verification, banks burdened by large non - performing exposures will still have to identify, in accord with the supervisory authorities, the best procedure for efficiently managing those assets in order to gradually work off the overhang. 3. 2 governance, cooperative ( popolari ) banks and mutual banks change to the banking system has been given significant impetus by the reform of italy ’ s main cooperative ( popolari ) banks. the first steps provided for by the law for their conversion into joint stock companies have been taken : the presentation of the plans laying out the steps required and the timeframe within which the operations will be completed, which in many cases could be by the middle of next year. in recent days the project for the conversion of one large cooperative group – directly subject to the single supervisory mechanism – was approved by the shareholders ’ meeting. as i have often had occasion to observe, a change in the legal form provides a golden opportunity for strengthening corporate governance to permit more rapid access to capital markets and facilitate mergers that could help to increase profitability. it is not for the authorities to suggest or impose any merger plans, which must be identified and decided by the corporate bodies themselves. merger projects developed by the market will be carefully appraised in terms of their current and future financial soundness and the effects on the banks ’