ignazio visco : address - ordinary general meeting of shareholders address by mr ignazio visco, governor of the bank of italy, at the ordinary general meeting of shareholders, rome, 31 may 2023. * * * ladies and gentlemen, the international situation continues to be marked by profound uncertainty. geopolitical tensions and the repercussions of russia's aggression against ukraine led to a slowdown in global economic activity and contributed to the return of inflation. in 2022, the governing council of the european central bank ( ecb ) accelerated the process of monetary policy normalization, which had already started at the end of 2021, by intervening on purchases of securities held for monetary policy purposes, on interest rates and on the conditions applied to refinancing operations. the decisions taken have also been reflected in the annual accounts submitted to you today and will affect those of the coming years. we are keeping a close eye on the ongoing market tensions. the euro - area banking sector, thanks to capital strengthening policies and other prudential safeguards introduced for all european banks after the global financial crisis, is well capitalized. however, if necessary, the eurosystem stands ready to act with all available tools to maintain the effectiveness of the monetary policy transmission mechanism and to preserve financial stability. monetary policy and its impact on the bank's annual accounts the eurosystem's net asset purchases under the pandemic emergency purchase programme ( pepp ) and the asset purchase programme ( app ) ceased at the end of march and at the end of june 2022 respectively. the governing council of the ecb has decided that the full reinvestment of the principal payments from maturing securities purchased under the pepp will continue until at least the end of 2024. conversely, for the app, the outstanding amount will be reduced, at a'measured and predictable'pace, by €15 billion per month from the beginning of march to the end of june of this year, to be recalibrated over time to ensure consistency with the monetary policy strategy and stance. from july 2021 until the end of 2022, the key ecb interest rates were increased by a total of 250 basis points, bringing the rate on the main refinancing operations to 2. 5 per cent, the marginal lending facility rate to 2. 75 per cent and the eurosystem's deposit facility rate to 2 per cent at 31 december. over the last two months, the ec

##2 and the new anti - money laundering supervision and regulation unit was formed. the bank's role in europe as a technology - intensive service provider in the areas of payment systems, markets and statistics has been further consolidated. we have been driving the development of the european infrastructure for settling transactions in central bank money ( the target system ) and play a primary role in its operation ; we are testing out banknote security features that will benefit the entire eurosystem ; we oversee payment systems, services and instruments to ensure adequate levels of security and efficiency, with benefits for customers. we are actively involved in the preparatory work for the possible introduction of a digital euro. organizational and management structures have always been adapted promptly to changes in functions and in their working methods. the transition to a departmental model, associated with greater functional responsibilities and greater autonomy in resource management, has been completed. these changes reflected both new strategic policies and the need to react quickly to external changes. for example, by establishing the directorate general for consumer protection and financial education we have demonstrated our focus on protecting consumers of financial services and raising their awareness. in recent years, we have strengthened the bank's role as an accelerator for innovation and for the digital development of the financial market by complying with strict security, inclusiveness and transparency standards. with the establishment of an innovation centre based in milan to support the development of innovative projects in the banking, insurance and financial sectors, we have created an informal channel for dialogue with operators. we fulfilled our legal mandate by establishing the regulatory sandbox – under the coordination of the ministry of economy and finance and in cooperation with consob and ivass – which allows market operators to carry out tests in a controlled environment. the italian payments committee, which we coordinate, defines possible strategies and application solutions for the entire domestic system. we strive to use the best corporate management practices. we introduced a new threeyear strategic planning system, with the aim of giving full prominence to the priority objectives in the allocation of resources. we are concluding a process of gradually integrating staff planning with that of it, logistical and financial resources. the bank's presence throughout the country has gradually been adapted to the changing demand for services and technology and to the increased demand for protection on the part of the public. we now have 38 branches, with partly different functions. the closure of local branches over time – from 97 in 2007 – addressed the need to ensure the greatest operational efficiency without reducing the quality of the 4 / 6 bis - central bankers