italian banking association annual meeting speech by the governor of the bank of italy ignazio visco rome, 10 july 2018 cyclical conditions and the economic outlook in italy, as in the other main advanced economies, economic activity slowed in the early months of 2018, with the signs of deceleration continuing in the spring. the confidence of households and firms has nonetheless remained high, with positive indications also coming from the expansion of bank lending and improvements in the labour market. although unemployment is still above 10 per cent, employment has surpassed the peaks observed prior to the double - dip recession. in more recent months, both the fixed - term and, to a lesser extent, permanent components have recorded increases. in most of the forecasts made by national and international institutions, italy ’ s growth is expected to exceed 1 per cent on average in the three years 2018 - 20. this scenario assumes monetary policy will continue to be accommodative and financial conditions relaxed, and that there will be a favourable economic environment worldwide. in recent months, however, there has been a notable increase in the risks connected with the united states ’ protectionist policies and with disagreements on various fronts in relations between eu countries. last june the governing council of the european central bank recognized the progress that had been made towards a sustained increase in inflation rates in the euro area – progress associated with increased employment, greater use of productive capacity, accelerating wage growth, and the recovery in inflation expectations. though acknowledging that there are still ample margins of uncertainty, it was decided to recalibrate the asset purchase programme and in any event to maintain an ample degree of monetary accommodation in order to achieve the objective of price stability. if cyclical conditions in the area remain consistent with the current medium - term outlook, from october net asset purchases of securities will be reduced from the current €30 billion a month to €15 billion and will cease at the end of the year. the principal payments from maturing securities will continue to be reinvested for an extended period of time after the end of the net asset purchases. the governing council also said that it expects to keep interest rates at their present low levels at least through the summer of 2019. this prudent approach is also necessary to counter the risk of sudden surges in long - term yields and of volatility in the financial markets. given the prospects of growth and of a steady rise in inflation, italy is in a position to weather the gradual changes in the tone of monetary policy. the

martin, chairman of the board of governors of the federal reserve system from 1951 to 1970, and donato menichella, governor of the bank of italy from 1950 to 1960. baffi stayed at the fed for a few months in 1956. in the 1960s other countries – the uk and germany among them – began to publish national financial accounts on a regular basis. these accounts became part of a triad that also included non - financial national accounts and input - output tables. 3 real national accounts had begun to be compiled following the keynesian revolution, as the invention of macroeconomics and the definition of the attending concepts ( income, consumption, investment, savings ) prompted the development of statistical methods to produce a reasonable approximation of the real - world counterparts to those concepts. the first release of the united nations ’ systems of national accounts came in 1947. once the statistical foundations for real national accounts had been laid, moving on to financial accounts seemed natural. as we were soon to learn, this was no easy task. even more, making the two sets of macro accounts consistent, i. e. integrated – a logical and easy step in theory – was in fact very difficult in practice. the effort to understand and possibly control business cycles after the devastation of the great depression was itself a powerful driving force for the development of financial accounts. financial variables such as bank loans and deposits, bonds and shares, arranged within a consistent framework, were seen as necessary to get a full picture of the cyclical factors in the economy. baffi was worried about the lack of good data : ‘ at the research office, where we follow and analyse statistics, principally of a monetary and financial nature, we find ourselves poorly equipped to understand the movements of non - monetary aggregates, barring those associated with foreign trade and the manufacture of some products. yet such movements are among those at the root of financial phenomema …. we are at a similar disadvantage as regards our knowledge of the problems encountered by business enterprises … ’ ( excerpts from a letter written in january, 1941 ). klein l. r. ( 2003 ), ‘ some potential linkages for input - output analysis with flow - of - funds ’, economic systems research, 15, september, 269 - 277. the availability of information on financial flows may also have been regarded in those days as instrumental to economic planning ; in some western countries this was considered a very important and effective tool of economic policy in the post - war period. with illusions of top