an ad hoc statistical survey initiated last summer of all less significant banks will enable us to intervene further with requests for additional information, including through on - site inspections, and we will send warning letters should it emerge that banks are underestimating these risks. we therefore now have a situation that does not seem to require any new generalized government measures. two years on from the start of the pandemic, banks can assess for themselves the possibility of restructuring their loans to firms that are able to overcome temporary difficulties, by analysing individual exposures and taking on the related risk. although the banking system as a whole is not in a bad condition, there are still some cases of fragility, mainly concerning small and medium - sized banks with a traditional business model. for many of these, low credit quality adds to the difficulty of curbing costs and responding to the challenges of technological innovation. last year, as i announced at this very meeting, we conducted a survey on a broad sample of the banks under our supervision, asking them to provide a self - assessment of the sustainability of their business models. the responses returned a diverse picture. most banks have balanced financial conditions, together with a sufficiently clear and informed view of the trends, risks and opportunities of the current market situation. for a non - negligible number of them, there were some uncertainties at strategic level and some weaknesses around their ability to generate adequate income flows, sometimes associated with low capitalization. in our experience, the corrective action requested by the bank of italy is all the more effective the faster the banks react. for some of the less proactive banks with managerial shortcomings, the weaknesses could result in a crisis in the absence of suitable corrective measures ; therefore, they were asked to make a rapid assessment of possible options to prevent deterioration and to return to the path of full sustainability. these issues will remain central to discussions with the bank of italy in the months to come and more incisive interventions could be made if there are any uncertainties and delays in taking the necessary corrective action. the european commission is currently revising the bank recovery and resolution directive ( brrd ). in the public consultation, together with the ministry of economy and finance, we underlined the importance of a greater harmonization of the national insolvency rules for non - systemically important banks in order to avoid disorderly liquidations that might provoke an unjustified loss of value and contagion risks. taking inspiration from

welcome address ignazio visco governor of the bank of italy bank of italy / cepr / eief conference on “ ownership, governance, management and firm performance ” online event, 21 - 22 december 2020 • it is my pleasure to open this conference on “ ownership, governance, management and firm performance ” organised by the bank of italy together with the centre for economic policy research and the einaudi institute for economics and finance. this conference bears witness to the bank of italy ’ s interest in productivity, the main force behind aggregate economic growth and welfare improvements. • the slowdown of labour productivity observed since the financial crisis of 2008 - 09 clearly has a global dimension. many, possibly complementary, explanations of this phenomenon have been advanced. demographic developments and the evolution of technical change are certainly crucial determinants of the trends in capital intensity and total factor productivity. on the demand side, the imbalances between saving and investment propensities fuelled by financial instability and protracted uncertainty are often mentioned as culprits of the possible entry into a secular stagnation mode. • against the background provided by the most likely reasons behind this sluggish trend, the policy debate has focused on the identification of possible remedies to contrast it. increasing and improving physical infrastructures, investing in knowledge and skills development, favouring innovation through the adoption of new technologies and supporting the reallocation of resources between firms and sectors are all triggers than can help to revitalise our economies. and even if the choice of whether and how to become more efficient is ultimately made at the firm level, there is no question that the public sector plays a key role in creating an adequate environment for “ doing business ”. • however, we are realising more and more that the evolution of total factor productivity depends on how production is organised, how technology is adopted, and how different skills are dynamically combined. therefore, corporate governance and management functions are key ingredients of the production process. it is not surprising that much more attention has recently been devoted to their role in determining firm performance and, eventually, contributing to economic growth. in this respect some of the issues discussed in this conference seem to me to be especially important : – ownership and governance shape attitudes toward risk, affecting the propensity to invest and innovate as well as access to external finance, with significant effects on firm size. they also define the “ incentive scheme ” under which economic agents operate within firms. indeed, one research topic