the need for measures meant not to alleviate the difficulties of some specific bank but rather designed to reduce the impact of the deep and protracted recession that has hit the italian economy since the global financial crisis : a solution that had been importantly adopted in other countries, evidently under a different regime and interpretation of the role of state aid rules. as a consequence, last january the italian ministry of economy and finance has reached an agreement with the european commission on a government guarantee scheme for senior tranches of securitised bad loans ( the so called gacs ). these guarantees comply with state aid rules as they are set up so not to be in contrast with what could be considered as market prices for npls, even if in italy a deep and well established secondary market for npls does not exist. therefore, the agreement marks a step toward the establishment of such a market, and also helps by ending the uncertainty accumulated over previous months. other measures recently adopted by the italian authorities are also meant to address the root causes of the high stock of npls. those on fiscal deductibility of provisioning have removed a penalising tax treatment of italian banks. last summer a first set of measures on bankruptcy and foreclosure proceedings were adopted to speed up credit recovery. the delays and widespread obstacles to court and out - of - court settlement of disputes are in fact a very important reason for the very high stock of npls in banks ’ balance sheets : a reduction of two years in credit recovery times could even lead to halving the level of bad debts as a share of the total. feedback from market operators indicates that some effects are beginning to be seen. in the last weeks, a private alternative investment fund ( atlante, managed by an independent italian asset management company ) has been first set up and then formally launched, with a twofold purpose. first, it is meant to support rights issues of italian banks to reduce the risk that in the light of the current difficult market environment such issues would fail, with potential spillover effects to other italian banks and ultimately to the entire economy ( and there has already been a case where substantial support has been provided ). second, it could invest in bad loans ( mainly junior and possibly also mezzanine tranches of securitised bad loans ) at prices that may benefit from the organisation, expertise and servicing available within the banking system. the fund has raised resources ( more than €4bn ) from italian and foreign investors ( banks, insurance

something that still differentiates, contrary to a new apparently established belief, banks from enterprises operating in different industrial sectors. to repeat something that i said a year ago, before the start of the current debate on the consequences of the new regulatory set - up, substantial observance of the rules on market protection and competition remain indispensable. however, in assessing the public role in the prevention and resolution of crises, and not only financial crises, i believe that greater consideration should be given to the characteristics that distinguish policies designed to activate market mechanisms from state aid that distorts competition. bis central bankers ’ speeches