constantly – towards the main goal : a forward - looking approach in assessing risks and vulnerabilities. both camps have to adapt their way of reasoning : supervisors when analysing data coming from undertakings, the latter when, for example, performing the own risk and solvency assessment ( orsa ). a second key point is what i consider now the top priority for the supervisory community in the eu : harmonization and convergence of supervisory practices. we cannot consistently manage a common regulatory framework if we accept for too long a playing field which is not level, arbitrages among national supervisors, discriminations in the protection of policyholders along national borders. this was often the case under solvency i, with so many national differences permitted by the eu directives. solvency ii allows a much more limited number of national specificities. we can more easily work on harmonizing supervisory practices, pointing to a really common approach. this means identifying the best practices and being ready, each of us, to adopt them in our national sphere even if they do not come from our own experience. it is not easy. day - to - day supervision remains in the national supervisory authorities ’ responsibility, with their different stories and long years of experience. spreading the best practices, irrespective of where they were developed, would sometimes require forgoing national pride in order to embrace the cause of rationality and efficiency. i believe eiopa can do a lot in this field. not only because “ enhancing convergence ” is in its mandate, but also because it is in the best position to collect and compare all the different approaches, identify and recommend the best ones, promote their common adoption, while acknowledging differences on aspects that actually merit to be treated differently. to accomplish this task the tools are already there. let me just mention the finalization of eiopa ’ s supervisory handbook, which we believe is “ the ” essential tool. hence, ivass very much supports it and is actively working on it. another important tool in order to select and share best practices is the “ peer review work ”. even in this case, we will need time. from our side, i can assure that we are seriously committed to such collective effort. a third key point is public disclosure. solvency ii will be a fantastic opportunity to better understand the risk profile and the business model of each company, for all the stakeholders : supervisors first, but also market analysts, board members and managers, journalists, politicians, and

requisites that are often hard to come by. first they require either a theoretical understanding of the phenomena to be predicted, as a basis for the prediction model, or phenomena that are sufficiently regular that they can be simply extrapolated. since the latter condition is seldom satisfied by data about human affairs ( or even by the weather ), our predictions will generally be only as good as our theories. the second requisite for prediction is having reliable data about the initial conditions – the starting point from which the extrapolation is to be made. i. visco, “ on the role of expectations in keynesian and today ’ s economics ( and economies ) ”, translated from “ sul ruolo delle aspettative nell ’ economia di keynes e in quella di oggi ”, in accademia nazionale dei lincei, gli economisti postkeynesiani di cambridge e l ’ italia, convegno internazionale, rome, 11 – 12 march 2009 ( http : / / www. bancaditalia. it / interventi / intaltri _ mdir / en _ visco _ 110309. pdf ). see, among others, j. vickers, “ inflation targeting in practice : the uk experience ”, bank of england quarterly bulletin, november 1998. see c. borio and p. lowe, “ asset prices, financial and monetary stability : exploring the nexus ”, bis working papers, 114, july 2002 ( http : / / www. bis. org / publ / work114. pdf ). see also c. bean, “ asset prices, financial imbalances and monetary policy : are inflation targets enough? ”, bis working papers, 140 ( with discussions by i. visco and s. whadwani, http : / / www. bis. org / publ / work140. pdf ). h. a. simon, the sciences of the artificial, mit press, cambridge, mass., 1972, p. 170. bis central bankers ’ speeches we must recognize that empirical models reflect historical experience in the values of their parameters and are mostly reliable when it is “ business as usual ”, that is, as long as our systems are not subjected to unusual pressure. it can be argued that their contribution to making informed decisions is limited, as they tend to become unreliable precisely when, following signs of structural discontinuity, the benefits of correct forecasting are greatest. indeed