had already been identified as the existing european stability mechanism ( esm ). the view that the prerequisite for all this was the creation of a single supervisor was immediately put forward, because this would have helped eliminate the mutual distrust, and so it had to be the starting point. the single supervisory mechanism ( ssm ) was set up in a record time : it was made up of the european central bank and the national supervisory authorities, and became operational in november 2014. such rapid implementation was possible thanks to a provision in the treaty expressly assigning the ecb prudential supervision functions. in addition, the ssm could right from the beginning rely on a whole set of common prudential rules ( single rulebook ), contained in the package of regulations crr / crd4 which had already transposed basel iii agreements in europe. in the meantime, crises of banks of different sizes had spread in many european countries, due to reasons ranging from the burst of real estate speculative bubbles, as was the case in spain and ireland, to the contagion of “ toxic ” instruments in structured finance, as in germany. banks in distress were saved using public resources ( bail - out ) : 240 billion euro in germany, borne by german taxpayers, 50 billion in spain, financed with the european funds collected by the esm, 40 billion in ireland and almost the same amount in the netherlands, and so on. in italy public intervention was only a tiny fraction of those just mentioned and – what ’ s more – took the form of a loan, very profitable for the state. on the other hand, in italy the burden of deteriorated loans was getting heavier and heavier, mainly as a consequence of the long recession. the massive public bailouts of european banks ended in the first half of 2013. in july 2013 the european commission issued a communication laying down guidelines on state aid, binding for all the member states. since then state aid could be granted only under very stringent conditions and subject to a “ burden sharing ” by shareholders and subordinated bondholders : a principle similar to the “ bail - in ” underpinning the new european bank recovery and resolution directive ( brrd ), which was being drafted. the new way of solving banking crises in april 2014, the european parliament approved the brrd, which fully introduced, as from 2016, the bail - in principle. since the beginning of this year the single resolution mechanism ( srm ) has become fully operational in the euro area

supervisors ’ participation in colleges, including when the case involves important branches or subsidiaries ; creating a new european system of financial supervisors ( esfs ) grouping three sectoral agencies ( the european banking authority, the european insurance and occupational pensions authority and the european securities markets authority ), for more effective supervision over the major european groups ; and forming a new european systemic risk board, in order to sharpen the macro - prudential focus of supervisory policy. a few weeks ago the commission released a consultation document setting out its projects for enhancing supervisory authorities ’ early intervention at ailing banks, and their crisis management and resolution. the idea is to revise european company and bankruptcy law, together with compulsory deposit insurance schemes, and, more generally, the financing of crisis intervention measures. the set of regulatory changes under consideration, once implemented, will have significant impact on the conduct of banking supervision over national and foreign intermediaries alike and on the roles and responsibilities of the various authorities. there will be a period of intense dialogue with intermediaries, whose organizational and business models could be affected. 6. conclusion i believe that the italian experience over the past twenty - five years has been positive on the whole. foreign banks have significantly enlarged their presence in italy and helped spread new business models, different even from those of their own home markets. these foreign intermediaries contributed substantially to the growth of the italian banking industry in terms of innovation, service quality and quantity, and stiffer competition. italian savers and investors benefited. the contribution was greater in some market segments, less noticeable in others. during the recent crisis, in italy – unlike other countries – the presence of foreign banks did not cause strains or inflict losses on italian savers and investors. however, more highly diversified lines of business and the rapidly evolving external environment have increased risk exposure, especially in some segments. the bank of italy has accordingly adjusted supervisory approaches and instruments to guarantee the continued effectiveness of its action, adapted to the evolution of risks. in recent years the chief focus has been on liquidity, operational, legal and reputational risks. the closer integration of financial markets heightens the danger of contagion. the debate on the effectiveness of supervision over the major cross - border groups, with their often overcomplex organization, is still under way. obviously, this is a question that ranges beyond national confines. if the crisis was – unquestionably – global, then the review and reinforcement of the supervisory architecture needs to be as internationally coordinated