higher. access to consumer credit has also become easier. the market in lending to households has expanded and matured. further progress must be made, however. both for home mortgages and for consumer credit, the interest rates charged by banks in italy are higher than the euro - area averages for similar transactions. the recent change in monetary conditions has led to a shift in the demand for mortgages from variable to fixed rate loans ; for the latter, the increase in interest rates has exceeded the european average. the new rules on covered bonds will enable banks to expand the range of funding instruments to finance long - term loans and reduce their costs ; this will have to be reflected in more favourable conditions for customers. data harmonized at european level show that italian banks ’ annual percentage rate of charge on consumer credit is still about one percentage point higher than the euro - area average, even though the gap has narrowed in the last few months. not all of the difference is due to risk factors or to the still limited development of the consumer credit market in italy. not even the entry of foreign intermediaries, which now account for more than one third of such lending, has proved a sufficient stimulus to competition. this must be strengthened, especially in distribution channels. according to data gathered pursuant to the law on usury, the interest rates charged by financial companies are higher still. furthermore, especially where small amounts are involved, rates vary widely even for transactions of the same type, such as personal loans, loans secured by wages and instalment purchases of consumer goods. this probably indicates insufficiently transparent contractual conditions and a pronounced segmentation of the market. the attention banks pay to customers and to their own reputation must be greatest when their contact with the customer is made through outside collaborators. it is necessary to check that each link in the chain leading to bank products charges commensurate fees, to assist in the fight against usury, and to act promptly in cases of suspected unauthorized banking or financial activity. the instruments are not lacking. brokers ’ terms and conditions are subject to transparency requirements. a bank employee who steers someone to an unauthorized person for banking or financial transactions commits a specific crime. certain characteristics of current account transactions that suggest usury have been made known by the italian foreign exchange office. the council of the european union has reached agreement on a new directive on consumer credit, which will be examined by the european parliament in the autumn. if approved, the directive will enhance consumer protection by providing for forms

ignazio visco : islamic finance and the european challenge opening address by mr ignazio visco, governor of the bank of italy, at the ifsb forum “ the european challenge ”, organized by the islamic financial services board ( ifsb ) and hosted by the bank of italy, rome, 9 april 2013. * * * ladies and gentlemen, i am pleased to welcome you today to this seminar, organized by the islamic financial services board and hosted by banca d ’ italia on the subject of islamic finance. as you know, the main prescriptions relating to financial transactions in accordance with islamic religious law are the ban on paying interest and the prohibition of excessive uncertainty and speculation in contractual arrangements. this is predicated on the principle that profits should be generated from fully sharing in the business risk of an investment ( the so called “ profit and loss sharing principle ” ). the asset - backing requirement complements these prescriptions, providing for the link between each financial transaction and an identifiable underlying asset. a few weeks ago i gave a lecture on the financial sector after the crisis. on that occasion, it occurred to me that the renowned economist and philosopher – and eventually nobel laureate – amartya sen had given in these same rooms the first of our scholarly lectures entitled to the memory of our late governor paolo baffi. sen ’ s lecture was on “ money and value : on the ethics and economics of finance ”. it is of course an interesting and good read in these difficult days. but what i was most intrigued by was sen ’ s question : “ how is it possible that an activity that is so useful has been viewed as morally so dubious? ” there are indeed a good finance and a bad finance. while we may have some differences in ideas and perceptions on the goods and the bads, i think that what is most important is really to focus on the link between financial transactions and underlying assets, to conclude, with sen, that “ finance plays an important part in the prosperity and well - being of nations ”. indeed, it is crucial for sharing and allocating risk, especially for poorer societies and people. it is crucial for transferring resources over time and removing liquidity constraints. it is very important for fostering innovation and promoting economic growth. but it has to be certainly “ ethical ” and certainly transparent. an accurate measure of islamic financial services is difficult, due to the lack of official statistics. however, some private estimates assess the current size at about 1. 6 trillion dollars,