part to a large volume of public guarantees on bank bonds, which will mature in the next few years, however. going forward, the supply must be maintained by increasing the share of eligible assets, among other things by adding new types. great care must be taken to ensure that loan granting procedures meet the requirements for eurosystem refinancing. in the coming weeks we will call on the banks for an examination of the steps to be taken. in several cases italian banks not only provide finance, they also participate directly in the capital of firms. this can lead to a more accurate assessment of a firm ’ s growth prospects and a better evaluation of its financial needs. however, a participating interest can sometimes distort lending decisions ; as the size of shareholdings and loans increases, there is the risk of collusion or of actions designed to delay the surfacing of difficulties. the banks ’ governing bodies must properly safeguard against these risks : to maintain loan quality and keep banking profitable, in the banks ’ own interest ; to protect the value of the savings entrusted to them, in the interest of their customers ; and above all to ensure the efficient allocation of savings and boost the competitiveness of the productive economy. in january the legislation on related - party transactions came into force. it aims to protect banks from potential conflicts of interest with closely connected parties ; it provides a necessary counterweight to the european rules easing the restrictions on the links between banks and industry. the limits on exposure to each related party are calculated in relation both to the amount of credit granted and to the size of the bank ’ s shareholding in the company. the decision - making process on these matters must be transparent and correct and the outcome suitably motivated. the banks must be scrupulous in applying the new rules. the bank of italy will evaluate the effectiveness of the measures they adopt ; when necessary, it will intervene, possibly by setting stricter limits and conditions for related - party transactions. the difficulties besetting the credit system highlight once again firms ’ overdependence on bank lending. by international standards italian firms are undercapitalized, make very limited use of the capital market, and tend to limit scrutiny by investors. the credit market tensions will persist in the months to come. bank loans cannot be the sole source of external finance, as they are at present for most firms. the financing of investment must also tap new resources as well. it is in the banks ’ interest to encourage this process by

governance. ahead of global regulatory developments, the bank of italy has issued rules on governance and stiffened them over time. it has urged the adoption of best practices and intervened repeatedly with corrective actions. progress in this direction must continue. a number of unresolved problems remain to be tackled. i addressed two – the role of the banking foundations and the governance of cooperative banks – in my concluding remarks last may. here i would like to offer some further considerations. in most cases the presence of the foundations among banks ’ shareholders has fostered stability. during the crisis, in the absence of other large investors, some of them underwrote very substantial capital increases. at this point foundations should be encouraged to diversify their investment portfolios, so as to loosen their sometimes excessive dependence on the performance of their reference bank and prevent interference in banks ’ governance and business choices. this would be conducive to the inclusion of new investors in the banks ’ shareholder base. analyses of banks ’ bylaws, shareholder pacts and shareholders ’ behaviour at general meetings have shown that some foundations tend to interpret shareholders ’ prerogatives very extensively indeed. this has produced excesses, at times impeding the necessary turnover within the governing bodies and causing directors to be chosen according to criteria other than professional qualifications. episodes of this sort have an adverse effect on banks ’ performance, limiting their ability to finance the economy. measures to prevent their recurrence must be taken as soon as possible. the charter adopted by the association of savings banks and foundations in 2012 calls for transparency in the criteria and procedures for appointing the members of foundations ’ decision - making bodies. it establishes waiting periods and incompatibility conditions with respect to previously held political positions. it sets experience and independence requirements for the top officers of foundations and also of the banks in which they hold stakes. these indications must be made fully effective. they must also be strengthened by prohibiting passage from top positions in foundations to those in banks. bis central bankers ’ speeches the ban on controlling stakes to which the largest foundations are subject must be fully observed, if necessary by redefining control in such a way as to cover its exercise on a de facto basis or jointly with other shareholders. adequate measures for enforcement of the ban must be instituted. incompatibility with other positions and stricter requirements for bank directors also need to be provided for. the imminent application of the fourth revision of the capital adequacy directive offers the occasion for reinforcing the