acri association of italian savings banks 2016 world savings day address by the governor of the bank of italy ignazio visco rome, 27 october 2016 there are mixed signals from the global economy. on the one hand, the most recent data show that economic activity is strengthening in the united states and in china, while russia is pulling out of recession ; on the other, the available data for the third quarter point to a fresh weakening of international trade. overall, uncertainty prevails : the difficulty of predicting the impact of technological development on the economy and employment and managing that of demographic trends has been compounded by growing political and geopolitical tensions. uncertainty in the european union has been heightened by a number of specific factors. the tensions associated with managing exceptional flows of migrants, at a time when mutual trust is already impaired, are driving deep wedges in relations between the member states. the proliferation of nationalist movements, which are openly hostile to the single currency and plans for further integration, is casting a shadow on europe ’ s future, which has lengthened in the wake of the uk referendum. european politics remains mired in short - termism ; individual countries tend to favour internal contingent interests over more far - reaching common initiatives. the outlook for the euro area remains that of stable but moderate growth, with inflation recovering gradually but still excessively low, and elements of persistent frailty in the financial system. uncertainty is driving firms to increase their liquidity and discouraging investment ; it is holding back household consumption while at the same time greater precautionary saving is not going into financing additional business investment. while averting a deflationary spiral, the exceptionally expansionary measures adopted by the governing council of the ecb aim to bring inflation back in line with the objective and support demand. but monetary policy by itself is not enough. the absence of a common fiscal capacity that could be used countercyclically is weighing on the euro area, a situation which is all the more worrying when many countries have scant room for manoeuvre at national level and others hesitate to adopt expansionary policies. in any event, monetary policy cannot serve to raise the area ’ s growth potential. what is needed instead are policies capable, at a time of major change, of recasting the structural traits of our economies. the reforms underway in several countries must continue apace. in italy, the economic recovery continues but remains stunted. after stalling in the second quarter, economic activity appears to

##igate and account the so - called " double materiality " approach will be adopted, meaning that esg reporting must cover both the impact of environmental issues on the company and the impact of the company on people and on the environment. for the negative externalities they generate in terms of human rights and environmental impact. in particular, intermediaries should refrain from investing in counterparties that have adverse impacts on the environment and human rights ; alternatively, they should define ( potentially very costly ) measures to mitigate and reduce impacts. the directive would have implications for the entire “ value chain ” of large companies, e. g. for supplier companies not belonging to the group, regardless of their size. 5 lastly, the csddd should introduce the obligation for large companies to prepare a transition plan consistent with the paris agreement. for banks, this obligation is also included in the proposed revision of the crr3 / crd6 prudential framework, at an advanced stage of negotiation. albeit still in an embryonic stage, another important aspect concerns the non - financial reporting audit framework. the roadmap for addressing climate - related financial risks by the financial stability board proposes to define such a framework. in europe the csrd will make the certification of non - financial declarations mandatory starting from 2024 ; it will be initially set to less stringent criteria, a more stringent approach is envisioned from 2028. currently companies subject to nfrd publish audited sustainability data in some european countries only, among which italy. regarding reporting requirements for banks under the third pillar, the second capital requirements regulation for banks ( crr2 ) provides that large financial institutions6 that have issued securities listed on a regulated market of any of the member states must publish information on esg risks every six months. the technical document for the implementation of this legislation prepared by the eba requires banks to publish more detailed qualitative and quantitative information than those currently reported under the nfrd. 7 as for timing, the eba has adopted a transitional regime. the banks concerned will be required to publish a first set of data in the first months of next year, with reference date end 2022. based on the current text of the crr3 proposal, this obligation will be extended to all banks from 2025, according to criteria of proportionality that are still being defined. regarding transition risks, banks will have to publish, among other things, their exposures towards the ten high - emissions sectors defined by the european