ignazio visco : closing of the cultural days of the european central bank – italy 2011 address by mr ignazio visco, governor of the bank of italy, at the closing of the cultural days of the european central bank – italy 2011, european central bank, frankfurt am main, 17 november 2011. * * * mr. president, caro mario, cher christian, colleagues of the central banks, ladies and gentlemen, i attended this evening ’ s closing concert of the european central bank ’ s cultural days dedicated to italy with great pleasure and it is with great pleasure that i now take part in this ceremony in which the baton passes to christian noyer, governor of banque de france. since october 19 the public in frankfurt has had the chance to meet many representatives of contemporary italian culture, artists known and admired the world over and emerging young talents. in this month a gust of italy seems to have blown across frankfurt ( thanks, too, to the coincidence that the cultural events happened to be held at the same time as the installation of an italian president in the eurotower ). after our many years of work together in banca d ’ italia, i again express my best wishes to mario draghi as he takes up the challenge of his new position. music has been the fil rouge of this month of italian culture, inaugurated by the orchestra mozart of bologna under the direction of maestro claudio abbado and concluded this evening by the remarkable and fascinating performance of the orchestra verdi of milan under maestro xian zhang. in between, the master violinist uto ughi performed on the occasion of the charity event. to be sure, there has been no lack of significant moments dedicated to the other expressions of italian culture, with the participation of great contemporary italian writers, such as claudio magris and dacia maraini, and the projection of a series of italian movies in which six directors confronted the theme of the family between tradition and modernity. contemporary music, too, has been showcased, with the virtuoso, high - energy performance of stefano bollani, one of italy ’ s most celebrated young jazz musicians. still, we wanted to open and close the programme in the grand tradition of classical music. the two orchestras – the mozart of bologna and the verdi of milan – have an important common denominator : both are examples of how superb results can be achieved when there is the active will to discover and promote young performers and the conviction that music is both a means of

capital enables investors to benefit in full from the returns to successful innovation. banks must understand that there is, here, a long - term benefit for them, too. as margins on traditional intermediation shrink and the need to contain leverage sets limits on loan growth, banks should constantly improve their ability to provide more diversified financial services to firms, especially smes. they can play a key ( and profitable ) role in accompanying firms along a path to a better balanced, more robust and flexible funding structure. progress in this direction would be beneficial both for banks and for their customers. a number of empirical studies have found a strong positive causal link between the availability of capital and investment in innovation. a recent study for italy concludes that the issue of shares increases the probability of a firm ’ s undertaking r & d investment by around one third. venture capitalists and other investors specializing in financing innovative enterprises are undersized in europe by comparison with the us. long - term financing, and equity financing in particular, is hampered by both demand and supply factors. on the demand side, the costs of disclosing the relevant information to external investors are often very high compared to the scale of business ; often small firms ’ problems of asymmetric information are amplified by their family - based management model. on the supply side, access to market financing is hindered by the low propensity of institutional investors to invest in these companies ’ securities. the high risk and low liquidity of smes ’ securities do not fit the preferences of most institutional investors, which often lack the expertise to manage the risks associated with this asset class. designing policies to foster investment in securities issued by smes is a difficult task, and in the past the results have often been disappointing. but the challenge is worth taking up. the bis central bankers ’ speeches commission ’ s march 2013 green paper on long - term financing to support structural economic reform and return to a long - term trend of economic growth in europe specifies a number of proposals that constitute a solid basis for future work. the essential goal is to make small enterprises and the entire economy more resilient vis - a - vis shocks to banks and to enhance the capacity to finance growth and innovation. 6. conclusion small and medium - sized enterprises in europe have been hit hard by the crisis, and in several countries their ability to raise external finance has been and still is constrained. a good many counter - measures have been taken, ranging from monetary policy to the allocation of resources from national