macroeconomic shock ; at the same time it seeks to avoid, through state intervention, preferential treatment in one jurisdiction rather than another, an undoubtedly valid objective which might perhaps have been assessed over a longer - term horizon than that beginning with the sovereign debt crisis. but progress on other fronts has and can still be made. last summer new measures on bankruptcy and foreclosure proceedings were adopted to speed up credit recovery. although we still need time to appraise the results in full, feedback from market operators indicates that the first effects are beginning to be seen. further legislative provisions, in addition to those already passed, could further cut credit recovery times : a thorough review of bankruptcy legislation with a view to creating incentives for the rapid settlement of disputes and to removing the obstacles that hinder or delay out - of - court settlement ; new measures on how the courts are organized. when i addressed the italian banking association last july, i underlined how a reduction of two years in credit recovery times could substantially decrease, eventually even by half, bad debts as a share of the total. the ministry of economy and finance has reached an agreement with the european commission on a government guarantee scheme for senior tranches of securitized bad loans. the agreement does not require banks to make further provisions and marks an important step toward the creation of a secondary market for non - performing loans, ending the uncertainty of the past few months. easier access to resources to finance the purchase of these loans enables them to be sold more rapidly and may lead to a non - negligible increase in their market value. along with possible new measures to expedite credit recovery the scheme could help to consolidate the balance sheets of italian banks and improve their ability to finance the real economy. there has been mixed market reaction to the announcement of the agreement ; a detailed analysis of its terms and effects will improve its reception. banks must step up their intervention in this area. the bank of italy will soon undertake a statistical survey of bad debts, designed to help banks to do more. it is time that the management of non - performing loans be given resources proportional to their weight on balance sheets, adopting a more business - oriented approach, bank size and operating model permitting. failing this, their management should be outsourced to specialized operators, with gains in efficiency and effectiveness. moreover, the share of non - performing loans ( almost one third of the total ) to firms in temporary difficulty but with sound chances of making a turnaround, especially given

‘ the g20 agenda in 2021, under italy ’ s leadership ’ global investor roundtable of the global foundation speech by daniele franco senior deputy governor of the banca d ’ italia rome, 3 february 2021 1. ladies and gentlemen, it is a great pleasure to contribute to the 2021 global investor roundtable of the global foundation. let me thank the secretary general steve howard for inviting me and for his kind introduction. governor visco addressed the rome roundtable last november and illustrated the prospects for the italian presidency of the group of twenty ( g20 ). i will update you on recent developments. i would like to start off by saying a few words about the context in which italy began its presidency. 2. we all know that the current global crisis is one of unprecedented magnitude. since the inception of the pandemic, more than 100 million individuals have been diagnosed with covid - 19 worldwide ; almost 30 million cases have been recorded in europe. more than 2 million people have died because of it, about one third of them in europe. the pandemic, combined with the containment measures introduced to curb the spread of the virus, plunged the world economy into one of the deepest recessions in recent history. in 2020, despite a short spell of recovery during the summer, world gdp declined by about 3. 5 per cent, the largest contraction since wwii. economic losses in the euro area and the uk have been particularly severe. fiscal and monetary authorities responded swiftly with massive expansionary interventions. the measures were aimed at strengthening the healthcare systems, at supporting firms ’ and households, and at preserving orderly monetary and financial conditions. the short - term objective of mitigating the immediate consequences of the pandemic was achieved, preventing the drying - up of liquidity, avoiding an immediate credit crunch that could have led to a large wave of defaults, and taming deflationary pressures that would have scarred the economic fabric of our economies and generated financial instability. 3. according to the latest projections released by the imf, global economic activity will surpass pre - pandemic levels by the end of 2021, with world gdp growing by 5. 5 per cent. the forecast has been revised positively, in light of expectations that vaccines would remove current restrictions in the second half of the year. however, projections are heterogeneous across world regions, owing to the differences in the access to healthcare, the effectiveness of relief measures, the exposure to cross - country spillovers, and structural