in public debt ) ; and of monetary and other financial policies, which reacted promptly and forcefully to the mother of all exogenous crises, ensuring that financial meltdown and a 2008 - style downward spiral were avoided. last week, the imf released their updated projections on global growth. they now expect an expansion of 5. 9 per cent this year and 4. 9 per cent in 2022. for italy, the imf ’ s projection for growth this year has improved from 4. 9 to 5. 8 per cent, while for 2022 it has been confirmed at 4. 2 per cent. our own expectations are similar. many advanced countries ( and, among the emerging ones, china ) have already reached, or are about to reach, pre - crisis output levels. in italy, we expect this to happen in the first half of 2022. there is unavoidable uncertainty about such projections. the latest crisis was utterly unprecedented. one can never rule out the possibility, for instance, that the pandemic will take another nasty turn, or that investor attitudes will suddenly change. and some delayed bankruptcies may well occur with the end of moratoria and other provisions. 1 / 5 bis central bankers'speeches meanwhile, fast growth has resulted in production and distribution bottlenecks, which may yet restrain further expansion, and have already pushed prices higher. we discussed this issue at length during the g20 meeting last week, and there was agreement that such bottlenecks are still likely to be transitory. this means that the markedly higher inflation rates that have recently been observed throughout the developed world can also be expected to recede over time, in part given the absence, so far, of wage pressures. as governor visco said in his introductory statement to the press conference that followed the g20 meeting, “ inevitably, the widespread uncertainty surrounding the current situation requires central bank governors to monitor price dynamics closely ”. he also said that “ economic policies should remain supportive for as long as necessary ”. last year ’ s crisis hit disadvantaged groups such as low wage earners, women, and the young in a disproportionate way. it also hit small enterprises and the self - employed, though with an extremely variable intensity. certain industries, especially in services, suffered a much heavier shock than average. there is evidence that in many countries, including italy, fiscal support has been broadly effective in countering the sharp increase in inequality that would otherwise have emerged. differences remain

have unintended business - cycle effects. the safety net - - particularly deposit insurance and access to the discount window - - clearly has an impact beyond the stability it brings by containing the deposit runs that once led to financial implosion. it induces intermediaries to take on more risk with less capital, creating what is arguably the largest problem facing modern bank supervisors - - wide swings in credit quality. even without government rules, however, cyclicality still would exist in financial markets, the real economy, and in the actions of financial intermediaries. cyclical financial volatility, for example, was significant from the civil war to world war i, a period that - - abstracting from some of the perverse currency rules that came from the banking act of 1863 - - was not characterized by substantial regulation and rulemaking. moreover, behavioral factors, even if there were no rules or regulations, would still be a formidable force in inducing cyclical changes in both the quantity and the quality of assets acquired and issued in the financial sector. the most basic is human response to risk. the often - repeated pattern in financial markets has been the periodic shift in risk attitudes, initiated by the state of the economy, among lenders and other asset holders. history instructs us that, during recoveries and booms, risk discounts erode as the level of optimism lowers the barriers to prudence. even those lenders less inclined to reach for more risk - laden proposals are driven to maintain their share of the rising credit flow, if not to increase it. the only way bankers can adhere to lending policies significantly more stringent than those of their competitors is to effectively exit significant areas of banking, pending, in their judgment, the return of sanity to banking practices. such an approach, however, is not consistent with a viable long - term banking franchise. to the majority of banks, the environment of contagious optimism makes more and more proposals seem bankable. ever less attention is paid to potential problems as the cautious voices appear curiously quaint and have little quantitative support because all the recent news and facts are favorable. even the supervisors and policymakers tend to be caught up by the process. their voices of caution are rarely raised because they, too, find it difficult to make a case for restraint because the quantitative indicators do not support caution until too late in the lending expansion. as cyclical imbalances inevitably develop, the typical pattern has been an evaporation of optimism among