among others, pisani - ferry, sapir, veron and wolff ( 2012 ). see for example goodhart ( 2000 ) and mishkin ( 2001 ). bis central bankers ’ speeches information on linkages between intermediaries. rapidly changing financial flows can affect the stability of intermediaries. 6 the second benefit is related to the common concern for financial stability. historically financial stability has been a main task for central banks, even without an explicit mandate. in many countries it has been a fundamental factor for their establishment. central banks conduct monetary policy to achieve price stability – in most cases their primary goal – and this in turn fosters broader macroeconomic stability and contributes to financial stability. but often central banks have specific responsibilities in the financial stability sphere, as this is a key precondition for price stability. central banks with prudential supervisory powers can pursue the objectives of price stability and financial stability with a wider set of instruments, whereas a central bank with monetary policy powers only might end up being overburdened. a common roof and the effects on independence – the independence of central banks is a topic deeply debated almost from the time of their inception. 7 in an essay of 1824 david ricardo identified the three pillars of central bank independence : institutional separation of the power to create money from the power to spend it ; a ban on the monetary funding of the state budget ; and the central bank ’ s obligation to give an account of its monetary policy. ricardo ’ s suggestions were taken up by the brussels conference of 1920. price stability was indicated as the primary objective of monetary policy but – as the final report of the conference maintained – if it was to be achieved, it had to be entrusted to central banks that were independent of their governments. 8 these principles were forgotten for many years after the second world war ( ww2 ). the conviction that a certain degree of inflation was necessary to support employment and growth came to the fore in economic thought and in the minds of policy makers. in many countries monetary policy was dominated by budgetary requirements ( fiscal dominance ) and central banks acted as buyers of last resort of government securities when they came onto the primary market. 9 the independence of central banks enjoyed little institutional protection. the stagflation of the 1970s suddenly brought to light what farsighted economists, such as edmund phelps, had already foreseen in the previous decade : in the short term there may be a trade - off between inflation and unemployment, but not in the

supervision of debt collection companies, known as master servicers. 33 some organizational shortcomings have been found, which call for stronger controls and improved risk management and recovery strategies, especially when these are outsourced. the most difficult challenge, and the one with the greatest impact on the real economy, is the management of loans to customers who are struggling but may recover. in order to draw up effective recovery plans for borrowers, companies working in this area need to improve their management, financial and advisory capacities. capital in light of the risks emerging to their activity, banks must safeguard the soundness of their capital base. since 2020, the increase in the capital ratios has been driven by the decline in risk - weighted exposures – the denominator of the ratio – mainly as a result of the state - guaranteed loans granted, which are gradually reaching maturity. 34 at the same time, the amount of capital has decreased. 35 these are called overlays, whose use is encouraged by the supervisory authorities to take account of risks ( such as geopolitical, inflation and climate risks ), not always adequately captured by ordinary models. see fsb, ‘ peer review of italy ’, 2024. all supervised servicers perform the guarantee tasks envisaged under law 130 / 99 ( master servicing tasks ). the recovery of securitized loans is almost exclusively left to third - party agencies, which are licenced to do so under article 115 of the consolidated law on public security ( testo unico delle leggi di pubblica sicurezza, tulps ) and are not subject to supervision ( special servicers ). special servicers have usually already been involved by the investor when due diligence is performed on the securitized portfolios and are responsible for preparing and updating business plans ; they are also directly accountable to investors for debt collection scenarios. around 80 per cent of the state - guaranteed loans to italian banks will expire by the end of next year. m. a. aiello, c. ciancaglioni and g. manzelli, ‘ risk - weighted assets dynamics for italian and ssm banks over the last three years ’, banca d ’ italia, notes on financial stability and supervision, 34, 2023. the trends in capital can be reversed by drawing on last year ’ s exceptional profits, thereby strengthening the banks ’ ability to absorb future losses. aside from the microprudential perspective, macroprudential capital buffer