consequences of this transformation, for the italian economy in particular? a substantial empirical literature indicates that in equilibrium ( that is, once the transition to the new regime is completed ), stronger capitalization of banks will have a positive impact on the supply of credit. 3 during the transition, however, the capital increases required by the stronger capital adequacy rules tend to adversely affect lending growth. and the same applies to increased liquidity requirements. evaluations conducted before the new rules were introduced support this thesis, even while indicating that the adjustment costs will be moderate, not so great as to compromise the net long - run benefits. 4 on the whole, internationally the adjustment to the new standards is being achieved essentially through increases in capital and liquidity, with no substantial impact on the provision of finance to the economy. 5 however, the effects of banks ’ deleveraging differ from country to country depending on both structural characteristics – such as the degree of development of the capital markets – and on cyclical factors, such as the stance of monetary and fiscal policies, the cyclical state of the economy and the financial conditions of firms. “ separation ” rules have been enacted in the united states, where the dodd - frank act introduced the “ volcker rule ” ; in britain, where the banking act made the proposals of the vickers commission into law ; in france, with the loi de separation des activites bancaires ; and in germany with the gesetz zur abschirmung von risiken. within the european union discussion on the need for similar measures was initiated by the liikanen report, which was followed by a commission proposal for a regulation, presented in january 2014 ( the barnier proposal ). the forms of separation differ from country to country. the volcker rule and the barnier proposal prohibit banking groups from engaging in certain types of business ( such as proprietary trading ), while the french, german and british laws only require that they be done by separate units within the group. for the united states, see j. peek and e. s. rosengren ( 1995 ), “ the capital crunch : neither a borrower nor a lender be ”, journal of money, credit and banking, vol. 27, no. 3 ; for italy, u. albertazzi and d. j. marchetti ( 2010 ), “ credit supply, flight to quality and evergreening : an analysis of bank - firm relationships after lehman ”, bank of italy working

, move into new markets, and support the best firms. now the need is to reduce the fragmentation that prevails in the system of cooperative and mutual banks, allowing for forms of integration that preserve these institutions ’ local roots and capitalize on individual banks ’ membership of banking groups. the solutions must be guided by the essential aim of enabling these banks too to turn readily to the market in order to raise capital, as well as by the purpose of improving the quality of their management. the cooperative banking systems of other european countries are much less fragmented than the italian system. the prevailing models centre on banking groups, in which the parent company exercises functions of direction and oversight over the banks in the group and, where necessary, can recapitalize them by recourse to the capital market. this model does not denature the cooperative form of the individual banks but allows them to maintain their characteristic mutuality and their community roots. integration of the system of cooperative credit is in the interest of the cooperative banks themselves, to ensure that cooperative and mutual banks can continue to operate independently in an environment requiring rapid provision for the needs for recapitalization and efficient management, and in the light of the narrower margins for intervention at troubled intermediaries. bis central bankers ’ speeches 4. conclusion in recent months the european central bank, in keeping with its mandate, has dealt effectively and flexibly with the pressures towards the fragmentation of the european markets and with the emerging threat of deflation, preserving the stability of the euro area. now this kind of flexibility, without prejudice to the rules we have instituted, is necessary at national and at european level in order to wed the objective of soundness of banks with the needs of economic recovery. where market failures occur, public intervention cannot be ruled out a priori. in their own interest the banks, despite the transition to the new set of european and global regulations and the likely gradual diminution of their role to the advantage of the capital markets, must enhance their capacity to provide financial support to the real economy. i have mentioned the priorities of the current phase : regaining efficiency, managing credit risk and strengthening governance. mergers can help in attaining these objectives. the financial system cannot solve such problems of the real economy as poor competitiveness and low productivity, on which i have not dwelt today. but it does have an indirect role to play in facilitating the transformation and growth of firms. banks can play this role while accompanying the development of the capital market and