increases that made it possible to weather the storm unscathed. just as the future promises to be challenging for banks, it will be challenging for their largest shareholders as well. the foundations will have to act on three key fronts : their own governance, the recapitalization of banks and self - discipline in their relationship with banks ’ managements. for the action of banks ’ control bodies to be adequate, it is necessary that the boards of their main shareholders, which help to elect them, be equally adequate. for the reasons described earlier, they will be asked to make a significant effort to strengthen banks ’ capital, an effort to be faced without flinching. the foundations must continue to take a long view ; they must understand that they cannot sacrifice the prospects of their banks and the economies they serve to the desire for immediate monetary returns, which, besides, are now harder to obtain. the italian experience of public banks is vivid in our memory. certain relationships between local economic groups, public banks and politics ultimately proved disastrous for the banks and deleterious for civic mores ; in more than one case, local development was hindered rather than helped. with great, conscious effort we worked our way free of this logic twenty years ago ; other countries now look to the italian experience. no one wants to turn back. growth and employment while the italian banking system may have withstood the global financial crisis of 2007 – 08 better than others, the recession that it provoked was especially severe in our country, driving annual output in 2009 down to the level of nine years earlier. and as we have seen, the difficulties of households and firms are now having repercussions on banks. but the recession does not appear to have halted the modernization of the productive system that we began to see towards the middle of the decade. the forecasts for gdp growth this year and next are scarcely 1 per cent. in the first half of this year economic activity benefited from the expansion of exports, which are now slowing. economic growth needs the contribution of domestic demand : the virtuous circle in which advanced models of consumption and farsighted investment lead to high and widely distributed incomes, hence further consumption and well - being. consumer spending is stagnating today because the real incomes of households are not rising and there is widespread uncertainty about the future. the central issue is the state of the labour market, which needs to be analyzed considering all the available indicators and reliable sources of information. the number of people in

marginal activities comparable to payroll jobs but with lower pay and less protection. institutional regulation of the product and labour markets influences self - employment in many ways, including by creating barriers that protect rents and generating incentives to evade the rules. independence and entrepreneurship are significant factors in the choice of many workers to engage in self - employed activities. often, they are the drivers of the capacity for innovation that has enabled italian industry to gain and hold a role in important sectors of world trade. in many other cases, however, self - employment is the fruit not of a choice but of the impossibility of finding salaried employment. the anomaly that gagliani underscored lay in this : the multiplication of formally independent but de facto subordinate employment positions, which he traced to the excessively large social contributions wedge and, more in general, to “ administrative inefficiency, the tax regime and broadly political protective acquiescence ” ( 2000, p. 82 ). in short, he viewed the hypertrophy of selfemployment as an imbalance to be corrected. in 2000 he wrote : “ a reversal of trend could come from ( a ) a strong and efficient public stimulus to innovation ; ( b ) the opening up of retailing to large - scale distribution ; and ( c ) the application to self - employment of effective tax treatment similar to that found in italy ’ s partner countries ” ( 2000, p. 90 ). gagliani drew this conclusion from a structural analysis of development processes and comparison of the italian experience with that of the countries that had industrialized earlier. his works did not contain an econometric test, but we can say today that his insight was correct. a comparative analysis on time series for 25 countries and 6 sectors shows that in countries where there is above - average tolerance of tax evasion, high tax and social contributions rates go together with a high share of selfemployment. furthermore, this share is greater, the more intrusive is product market regulation, especially if it is aimed at maintaining a fragmented supply structure, for example a traditional distribution network. 2 the removal of administrative barriers and restrictions can stimulate better exploitation of economies of scale and the growth of firms, above all in the service sector. recent studies on the structure of retailing show that these barriers reduce productivity, brake the adoption of the new information technologies and increase profit margins, leading to higher consumer prices. 3 conclusion as gagliani suggested, a careful analysis of the