greater advantage will be taken of the connection between antitrust action and prudential supervision. credit remains the heart of banking. competition in the credit market is increasingly vital. as the supervisory authority, the bank of italy will have a delicate dual task. it must validate the various internal models of risk control that the banks can use under basel 2. it will also have to check how these models are used in decision - making and, together with consob, how the international accounting standards are applied. as stochastic methods come into more widespread use, until the ways in which they are employed converge under the pressure of competition the credit “ product ” and its price will vary −from bank to bank and over time, and perhaps even for the same customer. in the product price / quality / quantity analysis performed for antitrust purposes, the benefits of assigning the antitrust powers to banking supervisors will increase. the supervisory authority is better informed because it has primary responsibility for the validation and checking of the banks ’ risk models and accounting methods. lastly, the urgent need for radical revision of bankruptcy procedures has become even more glaring. in a world in which corporate planning and decisionmaking are no longer deterministic but probabilistic, the old bankruptcy law, all black - and - white, without shades of grey ( liquid - illiquid, solventinsolvent, revocable loans, impaired loans and bad debts ) has become simply impracticable. even the vested interests that have stymied all attempts at reform for years now will have to recognize the need to rewrite the bankruptcy procedures from top to bottom. basel 2 and ias encourage customized standards where abstract and general principles are hard to apply to concrete cases. this is consistent with the principle that the courts must weigh not so much the outcome of companies ’ decisions as the process by which they are made. both extremes must be avoided : having directors ’ actions governed exclusively by established parameters on the one hand and placing excessive emphasis on the outcome, ex post facto, in judging their choices on the other. ultimately, in any event, jurisprudence will be crucial. long - term trends in the italian banking industry demographics banks existing at 31. 12. 1990 1, 064 banks existing at 30. 06. 2004 banks, that went out of business between 1. 1. 1991 and 30. 6. 2004 profitability and productivity 1980 - 1990 1991 - 2003 ( averages of annual data ; percentages ) return on equity

##10 billion, well above the level recorded two years ago. the net profit is €6. 3 billion, down by €2 billion compared with 2019. the impact of the eurosystem ’ s monetary policy on the bank of italy ’ s annual accounts in 2020, the governing council of the ecb confirmed its very accommodative monetary policy stance. the extraordinary measures concerned both refinancing operations and the monetary policy asset purchase programmes and had a significant effect not only on the size but also on the composition of the bank of italy ’ s balance sheet. besides introducing new refinancing operations to deal with the pandemic ( pandemic emergency longer - term refinancing operations, peltro ), the conditions applied to the third series of targeted longer - term refinancing operations ( tltro3 ) were made even more favourable to counterparties. overall, through these operations, the eurosystem has granted euro - area banks more than €2, 000 billion in funding since the start of the health emergency ( €415 billion to italian banks ). this year too, targeted refinancing operations will continue to play a key role in supporting banks ’ liquidity. the asset purchase programme ( app ) was strengthened by adding a temporary envelope of further asset purchases of €120 billion for 2020 to the monthly purchases of €20 billion already envisaged. the bank of italy ’ s net purchases for the year totalled €46 billion. the full reinvestment of the principal payments from maturing securities will continue for as long as necessary and in any case for an extended period of time, as the ecb governing council has announced many times and reiterated most recently on 11 march. in march 2020, we agreed to introduce a new public and private sector asset purchase programme, the pandemic emergency purchase programme ( pepp ), with an initial envelope of €750 billion, which was subsequently raised to €1, 850 billion following the increases decided in june and december 2020. the bank of italy purchased €116 billon during the year. the horizon for net purchases under the pepp was extended to at least the end of march 2022, and the horizon for the reinvestment of principal payments from maturing securities is set to continue until at least the end of 2023. at its meeting held on 11 march 2021, based on a joint assessment of financing conditions and the inflation outlook, the governing council decided