taxes introduced with the finance law for 2008 and the anti - crisis decree of last november ( more than €6 billion in total ). net of these items, there was a significant fall in corporate income tax. it should be noted that whereas the receipts from the oneoff taxes have basically run their course, the contraction in corporate income tax points to a fall in receipts from the second payment on account at the end of the year. 2. fiscal policy ’ s response to the crisis countries have responded to the severity of the crisis with discretionary policies to sustain the economy the severity of the crisis has created a vast consensus at international level on the need to accompany automatic stabilizers and monetary policy with discretionary countercyclical budgetary policy interventions. in italy, however, the high level of the public debt limits the scope for increasing the deficit. it remains possible to act through changes in the composition of the budget. it needs to be stressed that the sensitivity of the yields on public debt securities to the conditions of the public finances ( deficit and debt ) tends to increase in periods of turbulence on the financial markets : the yield differential between ten - year italian and german government securities widened in the second half of 2008 to more than 150 basis points and is still very considerable, of the order of 100 basis points. in the future, various factors will tend to increase the average cost of the public debt : the substantial recourse to the market by governments to fund measures for supporting the economy, the recovery of economic activity, and fears of a rise in inflation. in italy, the use of the budget for anti - cyclical purposes has aimed above all, including via administrative channels, to speed up the employment of resources already allocated and direct them in order to support aggregate demand and mitigate the social costs of the recession. the interventions the response to the crisis has consisted primarily in three decree laws, which together appropriated €25 billion of resources for the three years 2009 - 11 ( of which €17 billion funded by increasing revenue ), and in the draft mid - year budget revision. budgetary action came on top of measures aimed at guaranteeing the stability of the financial system and alleviating firms ’ liquidity problems. in november 2008 a first package was approved. in addition to several tax reliefs for firms, the package introduced transfer payments to low - income households ( known as the family bonus, which supplemented the social card scheme launched during the previous summer ) ; automatic income stabilizers were strengthened for the two

board of directors and management and they have a fiduciary duty to manage the institution in a honest and prudent manner. an unfit board and management will run the institution down for sure. the bank has developed and issued prudential standards and guidelines, and directives to allow the licensed financial institutions to develop appropriate risk management tools and practices that limit risks to prudent levels. it is the responsibility of boards, trustees and management of each individual institutions to adhere to these prudential and statutory requirements. the bank also conducts on - site inspections and off - site surveillance based on information provided by the licensed financial institutions. even the most successful supervisory agencies must rely, to some degree, on the information provided by individual financial institutions that it regulates, so that corrective measures can be taken – including placing them on statutory management and initiating liquidation of financial institutions. this brings us to the important issue of corporate governance, which has gained increased attention all around the world, including papua new guinea. although the companies act does not specifically emphasize corporate governance, the bank expects all the financial institutions that it supervises to adopt and implement good corporate governance practices. the issue of strong corporate governance cannot be overly emphasized because the roll - on effect of a financial institution collapsing, particularly in the case of a bank or life insurer, can be very dramatic for both individuals, and can severely affect the stability of the financial system. recent experiences in the asia, us, australia, and even papua new guinea, particularly in the superannuation industry, indicate that the risk of such collapses are heightened where poor corporate governance prevail. the bank, however, is aware that each financial institution is unique, in terms of its structure, objectives and operating environment, and circumstances change over time, particularly in regard to globalization, technology and innovation. it is, therefore, impractical to “ prescribe ” how an institution should structure its corporate governance practices. the bank, therefore, places the onus on the financial institutions, the need to embrace effective internal control measures, good accounting and strong corporate governance practices, and thorough risk - management procedures. these are fundamental to the institution ’ s management in achieving its objectives of ensuring proper conduct of business, so that the assets of institutions are safeguarded, fraud is detected and prevented, and accounting records are accurate and completed on time to prepare reliable financial information. external auditors, thus play a very important role in this game because their primary role is to test and ce