ignazio visco : overview of economic and financial developments in italy concluding remarks by mr ignazio visco, governor of the bank of italy, at the ordinary meeting of shareholders 2012 – 119th financial year, bank of italy, rome, 31 may 2013. * * * ladies and gentlemen, in these remarks i will give an account of a difficult year and speak about the severe test that we have all had to face. i will recall you of what has been done, describing the role of the bank of italy. i will speak about the progress made, even if it is insufficient ; about the results achieved, although these are still fragile ; about the need not to waste but to defend and consolidate these achievements in order to set the recovery process in motion ; and lastly about the conditions for a return to balanced growth. allow me to start with a farewell, in fact with more than one. on 28 april, in this delicate moment in the life of the country, our director general fabrizio saccomanni was called to join the government as minister for the economy and finance. endowed with outstanding personal and professional qualities, he has worked in almost all of the bank ’ s institutional and administrative fields of action. his experience, his thorough knowledge of the european and international organizations in which he has held prominent positions and performed important tasks for italy, the competence and balance he has demonstrated in his many years of service to the bank, for which we owe him a debt of gratitude, will be even more essential in the test that awaits him. we extend our warm best wishes to him. he is succeeded by salvatore rossi, our former deputy director general, who has for many years combined broad managerial responsibilities with economic analysis attentive in particular to innovation and development. as director general, he is also chairman of the insurance supervisory authority, which at the beginning of the year was placed by law under the direction of the governing board of the bank of italy, assisted by two outside directors. in july 2012 anna maria tarantola, the first woman on our governing board, left the bank to become president of the state broadcasting corporation rai, a challenging assignment that recognizes her management skills and professional rigour. in december, at the end of a career that was exemplary for commitment, dedication and analytical and institutional contributions, deputy director general giovanni carosio concluded his mandate. i would like to thank both of them warmly for their contribution of ideas and activity on behalf of the bank. between october

be substantially reduced if a smaller share of the multi - hundred - trillion - dollar derivatives market was referencing it. some possible alternatives include rates based on the u. s. treasury market or rates based on the secured funding markets that have replaced much of the borrowing banks used to do in the unsecured interbank market. the federal reserve is not seeking to dictate the particular rate that financial markets adopt. instead, we will encourage key market participants to further the work done by the fsb ’ s mpg by narrowing down the list of alternatives and developing them into robust reference rates that meet agreed - upon international standards and best practices. 12 there are enough suggestions on the mpg ’ s list to inspire confidence that we should be able to find common ground. any alternative would, of course, need to be in accord with the iosco principles mentioned earlier, and some potential alternatives would take time to fully develop. but the establishment of alternative reference rates for certain products is in our shared interests and would substantially strengthen the financial system. we are strongly committed that at least one such rate be developed and actively used as soon as practicable. and we look forward to working with financial institutions and other market participants to achieve this end. in the near term, the federal reserve, along with other government agencies, intends to meet with a wide range of market participants, including end users, to hear their views as to how change can be effected and to begin the work of developing alternatives to libor. later this year, we will convene a group of the largest global dealers to discuss these issues, following a model that was successfully used to promote derivatives reform. searching for potential alternative rates and encouraging their use will be a key point of that discussion. of course, end users will be affected by these changes as well, and we will also consult closely with key participants outside of the dealer community to make sure that reform meets their needs and is not disruptive to them. in particular, end users who want to continue to use libor will certainly be able to do so, and we will work toward the goal of ensuring that any changes to libor will not require borrowers or lenders to amend their existing contracts. and the markets that reference dollar libor are so enormous that there will surely be more than enough liquidity to support both a new risk free rate as well as libor itself. one of the lessons that i take from our study of libor is that these existing legacy