began to pinpoint problems and shortfalls, the bank of italy intervened with increasing forcefulness. in november 2011 this culminated in the summoning of the top executives of monte dei paschi and its foundation ( the principal shareholder at the time ), who were asked to implement rapid and sweeping change, something that came about in the months that followed with the appointment of a new managing director and the replacement of the majority of the members of the board of directors and board of auditors, as well as a major management shake - up. as is well known, the bank ’ s previous management had failed to transmit to supervisors the information that was vital for a full recognition of the scale and nature of several operations that had been carried out in violation of the law. the bank of italy imposed heavy sanctions on those responsible and brought the case to the attention of the judiciary, to which it offered its full cooperation. https : / / www. bancaditalia. it / media / approfondimenti / index. html. bis central bankers ’ speeches all in all, the actions taken enabled anomalous high - risk practices to be identified and brought to an end, impelling monte dei paschi di siena to reinforce its organizational safeguards and controls. the bank continues to be closely monitored nonetheless. the supervisory review and evaluation process ( srep ) for 2015 highlighted the persistence of several weaknesses, most importantly the share of non - performing loans. this was partly due to the highly expansionary lending strategy pursued before the crisis, which the bank is now actively addressing. structural solutions have also been called for, such as mergers with other credit institutions. in the case of carige, in recent years the bank of italy ’ s supervisory activity focused on the group ’ s weak capital position, which failed to meet the highest standards of basel iii that were about to be introduced, the progressive deterioration in the quality of its loan portfolio, and malfunctions in corporate governance arrangements and controls. the inspections conducted in 2013 confirmed these weaknesses and brought to light further, more clearly detailed issues, such as the existence of conflicts of interest on the part of the group ’ s top management. they also stressed the need for decisive and timely intervention to make a clean break with the past, enabling a proper rebalancing of corporate governance powers and the adoption of strategic repositioning and capital strengthening plans. following the inspections, sanctions were applied and the public prosecutor ’ s office informed. the new top executives appointed

deserve further investigation at euro area level, although it is likely to be less significant than between advanced and low - income economies. see acemoglu, d., johnson, s. and robinson, j. ( 2001 ), the colonial origins of comparative development : an empirical investigation, american economic review, vol. 91, no 5, pp. 1369 – 1401. 6 related to this, see aghion, p., farhi, e., and kharroubi, e. ( 2017 ), on the interaction between monetary policy, corporate balance sheets and structural reforms, presented at the ecb forum on central banking, sintra, june. the authors find that the announcement of outright monetary transactions ( omt ) only raised growth in countries where product market regulation is low. 7 see european central bank ( 2017 ), financial integration in europe. 8 milano, v. and reichlin, p. ( 2017 ), risk sharing across the us and emu : the role of public institutions, luiss school of european political economy. 9 see cœure, b. ( 2016 ), rebalancing in the euro area : are we nearly there yet?, speech at the danish economic society, kolding, 15 january. the case for a new convergence process is made by the five presidents ’ report of june 2015 on completing europe ‘ s economic and monetary union. see also coeure, b. ( 2015 ), towards a political convergence process in the euro area, speech at the interparliamentary conference “ towards a progressive europe ”, berlin, 16 october. 10 see draghi, m. ( 2014 ), stability and prosperity in monetary union, speech at the university of helsinki, 27 november. 11 evidence suggests that labour misallocation did not deteriorate much over time. see, for example, gamberoni, e., giordano, c. and lopez - garcia, p. ( 2016 ), capital and labour ( mis ) allocation in the euro area : some stylized facts and determinants, ecb working paper no. 1981. 12 see guillamon, c., moral - benito, e. and puente, s. ( 2017 ), high growth firms in employment and productivity : dynamic interactions and the role of financial constraints?, working papers, no 1718, banco de espana. 13 see, for example, barlevy, g. f. ( 2003 ), credit