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

the european regulations, the action of all the authorities must aim to preserve the value of the banking business to the benefit of savers, employees and the companies to which they lend. in the absence of these conditions, the vulnerability of the banks in crisis will increase, as we have seen in practice. the difficulties that preceded the agreement on the precautionary recapitalization of banca monte dei paschi di siena and the long and troubled discussions involving banca popolare di vicenza and veneto banca are not due to financial constraints, since the resources earmarked by the italian government are much greater than those needed to restructure these banks. the difficulties stem from regulatory obstacles, which can and must be removed. a solution for these two veneto banks must be outlined very shortly, protecting savers and guaranteeing the continuity of the business relationships maintained by the many small and medium - sized enterprises based in an economically important area of the country. the italian authorities are totally committed to resolving this problem. non - performing loans the problem of non - performing loans is easing as the economy recovers. the flow of new npls in relation to total loans now stands at 2. 7 per cent, which is lower than before the crisis. the stock, net of loan loss provisions, is also diminishing, from 10. 9 to 9. 4 per cent of total loans in 2016. the disposals already scheduled by the main italian banking groups will speed up the rate of decrease. the bank of italy has voiced its opinion on the matter of npls on several occasions. i will therefore simply mention again the key issues and refer you to other documents for a more detailed analysis. 3 one of the first issues relates to the strategies adopted by banks to manage npls. farreaching changes are necessary here. the guidelines published by the ssm are an important point of reference ; the bank of italy is extending them, with the necessary adjustments, to the banks under its direct supervision. there are a large number of options from which the banks can choose and they should take advantage of them. the italian banking system is now more aware of the various incentives, as is clear from the initiatives already under way, but a stronger and broader commitment is needed. banks need to get the most out of the instruments available for out - of - court settlement with firms regarding debt restructuring and the transfer of real estate collateral. the measures will only be effective to the extent that the