recent weeks, there has been a reversal in long positions, which in turn is associated with softening of prices. if this trend persists, it will provide substantial relief for global inflation management, particularly for large commodity importers, including india. further, although hardly a desirable way to control inflation, slowing global growth, in addition to reinforcing these favourable commodity price trends, will also help to moderate demand and keep capacity utilization low. this will contribute to moderating inflationary pressures coming from traded or tradable goods. iii. domestic growth prospects 2010 – 11 was a year in which the economy continued its recovery from the impact of the financial crisis. growth bottomed out at 6. 8 per cent in 2008 – 09, the crisis year, picked up to bis central bankers ’ speeches 8 per cent in 2009 – 10 and further to 8. 5 per cent in 2010 – 11. chart 3 shows two pictures of the growth trajectory. with reference to aggregate and sectoral gross domestic product ( gdp ) estimates, the trajectory in the graph suggests that the momentum is moderating somewhat, as the most recent quarters show decelerating year - on - year growth rates. the main contributor to this tendency is the industrial sector, which has shown relatively high volatility over the period displayed. it slowed significantly during the crisis, recovered sharply subsequently and has recently begun to slow down. looking at the industrial sector a little more closely, the graph displaying trends in industrial production provide some clues to its dynamics. the most volatile segments of the index, both of which are displayed on the graph, are capital goods and consumer durables. these are generally seen as being the most interest - sensitive components of the index and their recent trends suggest that the impact of contractionary monetary policy is having an impact. along with softening commodity prices, this trend will contribute to bringing inflation under control, by helping moderate demand pressures. of course, industry associations, including confederation of indian industry ( cii ), have been consistent critics of the monetary policy stance, arguing that it is slowing growth without really impacting inflation, which is being driven by supply side pressures. i will address this critique both in the discussion on inflation and the one on communication. in short, the domestic growth scenario suggests that the growth rate will moderate somewhat in the coming year. the reserve bank of india projects growth during 2011 – 12 to be 8 per cent in its baseline scenario. from the inflation management perspective, this is not an entirely undes

luigi federico signorini : building a strong financial system to assist innovative smes remarks by mr luigi federico signorini, deputy director general of the bank of italy, at the eu finance day for smes, italy, rome, 18 october 2013. * 1. * * small and medium - sized enterprises in the european economy small and medium - sized enterprises ( smes ) are a key feature of the european economic landscape. they account for 99 per cent of all eu firms, employ 67 per cent of all payroll workers and generate 58 per cent of value added. their contribution to economic activity varies significantly from sector to sector ; in 2010 their contribution to value added ranged from under 25 per cent in energy to over 80 per cent in construction and real estate. cross - country variability is also significant : smes ’ share was lower in the united kingdom ( 50 per cent ) and higher in portugal, spain and italy. in italy smes account for about 80 per cent of total employment and 68 per cent of business value added. in 2011 micro enterprises – firms with fewer than 10 employees – accounted for around a third of the italian firms ’ total value added, 8 percentage points higher than the european average. smes rely heavily on internal sources ( retained earnings ) to finance ongoing activities and investment ; their funding consists more of debt than equity and, among debt instruments, bank loans outweigh securities. the role of banks in smes ’ financing is linked to their ability to reduce the large information asymmetries typical of small firms. it is favoured by firms ’ inherent difficulty in going public, and sometimes their reluctance to do so, which limits their ability to place securities directly with non - bank intermediaries. specifically, smes ’ access to capital markets is often hampered by high fiscal and administrative costs, lack of transparency and the low propensity of family businesses to dilute control. access to finance is a major challenge for smes in normal times ; it has been much more so in europe over the past five years. the deep recession that hit most countries – a double - dip recession in some cases – dried up internal resources ; recurrent crises of confidence in financial markets, which put a brake on funding flows, and mounting bad loans made banks tighten their lending policies. these problems have been addressed with a variety of economic policy measures. central banks have used monetary tools to ease the liquidity crisis of the financial sector ; european institutions and national governments have used public resources both to help