typical of small firms, which in the past helped to sustain italian competitiveness, is no longer enough today. we need more medium - sized and large firms that can move rapidly and effectively into international markets and exploit the efficiency gains offered by technological innovation. when one of our firms has a chance to expand, it may be deterred not only by a fiscal, regulatory and administrative framework still perceived as uncertain and costly but also by corporate structures that are often kept impermeable to outsiders. widespread family control of businesses is not a specifically italian phenomenon ; what is, is the restriction of management to the family circle. sixty per cent of all italian manufacturing firms with ten or more workers are exclusively family controlled and managed, compared with bis central bankers ’ speeches under 30 per cent in germany and france. these firms have less propensity to innovate, engage less in research and development, and rarely penetrate emerging markets. the average italian firm has less equity capital than its counterparts in the other advanced countries. there is little diversification of sources of funding – consisting largely in bank credit – and the incidence of short - term debt is high. to encourage recourse to equity capital, as part of a comprehensive redistribution of public revenue and expenditure the taxation of the share of profit corresponding to the remuneration of equity should be reduced. including the regional tax on productive activity, the statutory tax rate on company income in italy is nearly six percentage points above the euro - area average. banks and banking supervision banks have stepped up their lending to firms markedly, in response to the recovery in demand for working capital : the increase amounted to 5. 2 per cent on an annualized basis in the three months ended in april ; the rate of growth in the twelve months to april was 4. 4 per cent, the highest among the main countries of the euro area. the ratio of new bad debts to outstanding loans remained high in 2010, at 1. 9 per cent, though far below the figure recorded after the recession of the early 1990s. the data for the first few months of this year signal improvement. many intermediaries have supported customers by granting debt restructurings or loan repayment moratoria. such measures, which rarely provide for capital increases or new business plans, must be targeted at firms actually capable of overcoming the crisis and not be merely a way for banks to put off booking losses. small banks have provided support to the economy, including during the recession. they have expanded their business both outside their

procedures more automatic so as to shield them from the arbitrary nature of political negotiations. the european parliament can have an important influence in this regard. as was hoped, rules similar to those governing national budgets will be extended to the surveillance of situations of macroeconomic imbalance, with special consideration for the state of member countries ’ external accounts. a commitment to reinforce the competitiveness and convergence of the national economies has been undertaken with the euro plus pact, which nevertheless needs to be made more binding. the new european supervisory authorities began operating at the start of the year. the european systemic risk board ( esrb ) is laying the foundations of the system to prevent and, where necessary, manage situations that are critical for financial stability. the european banking authority ( eba ) will consolidate supervisory rules and practices, which are currently fragmented at national level. bis central bankers ’ speeches monetary policy the eurosystem has played a crucial role in countering the effects of the crisis. the credibility it has gained over the years has enabled it to keep inflation expectations steady and to act with the speed and flexibility demanded by extraordinary circumstances. thanks to measures designed to ensure the supply of liquidity to the markets, the european central bank has avoided the collapse of the financial system. it has rapidly reduced the policy rate to 1 per cent, the lowest level ever reached by official rates in the euro - area countries. since the end of last year, the large rises in raw material prices have pushed the inflation rate to over 2 per cent. the ecb governing council has re - asserted its determination to prevent international price trends from provoking, apart from the inevitable short - term effects, a deterioration in inflation expectations. at its meeting in early april the council raised official rates by 25 basis points. even with this measure, monetary conditions remain accommodating. the grave repercussions of the sovereign debt crisis for the functioning of the financial sector have necessitated exceptional measures, as at the height of the financial crisis in 2008 and 2009. extraordinary measures to refinance the banking system that had been discontinued earlier have been revived ; a programme of purchases of sovereign debt securities issued in the euro area ( the securities market programme ) has been launched. these measures are by nature temporary and designed to safeguard the mechanism by which monetary policy impulses are transmitted to the economy ; in the case of the smp, moreover, they are for a limited amount and the effects on the monetary base are fully sterilized. the ecb has the task