banks make use of them. complete and reliable information on npls also needs to be made more widely available. the new system for reporting bad loans introduced by the bank of italy is a step in the right direction. there is ample scope for improvement in the quality of the data reported. in many cases the information on the status of recovery procedures and the nature of the collateral is incomplete. approaches differ as regards ongoing procedures ; not all banks act promptly. more effort is needed to reduce the backlog and exploit the new database to the full. the information must become part of the dossier provided to senior management so that strategies can be developed to maximize recovery rates. another important issue concerns the length of judicial proceedings. the global reform of arrangements with creditors that the government has set in motion, incorporating the rordorf committee ’ s proposal in a draft bill, will effectively lead to more efficient procedures and better see i. visco, the governor ’ s concluding remarks, 31 may 2017 ; f. panetta, seminario istituzionale sulle tematiche legate ai non - performing loans, 15 may 2017 ; c. barbagallo, i crediti deteriorati delle banche italiane : problematiche e tendenze recenti, 6 june 2017. outcomes. rationalizing and simplifying procedures – the aim of the delegated legislation – is an important step forward. organizational changes to encourage judicial specialization within the court system ( particularly as regards arrangements with creditors ) could be introduced within a short space of time. a law effectively creating specialized sections of the courts across the country – possibly by reviewing the competencies of the different courts and pooling at least the more complex proceedings – would bring further improvements. part of the problem of the excessive length of judicial proceedings is not due to the legislative framework. the italian courts vary widely as to the duration of proceedings for bankruptcy and arrangements with creditors. according to data by the ministry of justice, comparing the situation in the north and the south of the country, at the end of 2015 the average duration of mortgage foreclosure proceedings was 2 years in the trieste court district and 8. 2 years in that of messina. in the case of bankruptcy proceedings the duration ranges from 4. 8 years in trento to 15. 4 years in messina. improving the efficiency of the courts where proceedings take longer than average would be of considerable help in reducing the stock of npls. large fire sales of npls can only be a

supervisors must remain vigilant. implementing and updating international standards is crucial to adapting to new challenges. after all, for supervisors there are always'interesting times'ahead. 1 i wish to thank francesco cannata and fabio recine for their very valuable input. 2 the role of internal models has been fundamentally revised. for certain risks, such as the credit valuation adjustment and operational risks, rather than questing for perfection, the bcbs simply accepted the idea that models cannot provide meaningful estimates. for other risks, such as credit risk, the new standards constrain the possibility to achieve capital optimisation by imposing input floors as safeguards against overoptimistic assumptions ; moreover, the advanced modelling approach can no longer be used for certain portfolios where data are too few and cannot yield statistically robust estimates. for market risk, the bcbs fundamentally revised the approach to modelling to make it more consistent with the complexities of modern trading activities. an output floor was set as a safeguard against model risk. 3 the weighted average cet1 ratios of the main global banks included in the basel monitoring exercise sample almost doubled, from around 7 to around 13 per cent, and the leverage ratio almost halved, from around 3. 5 to around 6. 5 per cent. the liquidity position improved strongly ; the lcr and nsfr were always well above their minima during the same period. see the'evaluation of the impact and efficacy of the basel iii reforms'report, published in december 2022. 4 let me also recall, as the issue of asset valuation is sometimes raised, that in the lcr high - quality liquid assets ( hqla ) are marked to market and subject to haircuts. 5 see bcbs,'newsletter on bank exposures to non - bank financial intermediaries ', december 2022. 5 / 5 bis - central bankers'speeches