speeches fulfils their mission with the required independence. 5. this is only a brief summary of the regulatory requirements imposed by european and national legislation in this area. nevertheless, it is enough to recognise that the rules are manifold and demanding. however, events have demonstrated that these rules are indispensable when verifying the absence or ineffectiveness of self - imposed internal governance models. with the financial crisis, it was politically inevitable, as a result of the understandable social pressure, that the theme of banks ’ internal governance moved from soft law to hard law. is the regulatory framework and the oversight of its compliance by the authorities enough to prevent behaviours similar to those that caused the financial crisis? there is no doubt that this regulatory reinforcement, established and supervised uniformly at european union level, enables us to say that we are much better provided for in terms of corporate governance requirements to ensure financial stability, which cannot go unmentioned. but organisations are formed of people, and as such, the behavioural dimension has been recognised as essential for the effectiveness of a good internal governance model for banks and other enterprises. even the best models may not resist the determination of anyone who might want to sabotage them. but the better they are, the more difficult it is to do so, hence the extreme importance of banks being provided with a robust governance model. without an institutional culture that is oriented towards compliance with rules and best practices, based on values that ensure a lasting reputation, and which are therefore a source of value for the enterprise, the objectives of public regulation may not necessarily be achieved. in fact, institutional culture is an intangible concept but is decisive to the effectiveness of corporate governance. exemplary behaviour is developed in a social environment and becomes more difficult to obtain unless there is an inherent reward. if society does not value the ethical character of behaviours, it is difficult to expect that an organisational culture emerges in enterprises which favours the effectiveness of good governance and best practice. for that reason, ensuring the effectiveness of good corporate governance is not only a task for enterprises, regulators and supervisors ; its effectiveness depends on our collective ability to create a society that duly values ethics. thank you very much for your attention. 4 / 4 bis central bankers'speeches

of rules becoming in itself a source of uncertainty, and thus a hindrance to banking activity. looking ahead, there is reason to be confident. expectations are for a sounder and gradually more profitable european banking industry. this is also borne out by the market ’ s assessment of the outlook for banks. the completion of the regulatory reforms will dispel the uncertainty that is still preventing the market from fully perceiving the benefits of the reduction of excessive risks in banks ’ balance sheets. but we know that the stakes are high. for those banks that will not be able to withstand the increased pressure, it is important to prepare measures in advance that will make it possible for them to exit the market in an orderly fashion. should new crisis situations emerge, preserving financial stability will hinge critically upon the availability of an effective crisis management framework, one characterised by prompt and decisive action, close cooperation among all the parties involved, and a clear definition of responsibilities and priorities. this is how in the past even severe strains were overcome without damage to savers or the overall economy. the experience gathered thus far within the new european framework for bank recovery and resolution can teach us important lessons on whether the new set - up also meets such criteria. in particular, besides the resolution of banco popular in spain, earlier this summer three crisis situations were tackled in italy, leading to the precautionary recapitalisation of banca monte dei paschi di siena, and to the orderly liquidations of veneto banca and banca popolare di vicenza. all these decisions complied fully, albeit in different ways, with european legislation and procedures. to the extent permitted by these rules, efforts were made to find the solution that best protected the interests of all parties involved ; the recourse to public funds represented only a small fraction compared to the taxpayer money employed just a few years ago by other countries in overhauling their own banking systems. the measures adopted have been successful in eliminating the tail risks weighing on both individual banks and the sector as a whole. in fact, over the last six months, stock prices of major italian banks rose by 25 per cent, against the 11 per cent on average for major european banks. however, these initial experiences have also highlighted some inadequacies and pitfalls in the new resolution framework. in the italian cases, the final decisions were adopted only following a lengthy and complex process due to the fact that in some instances ( e. g. the precautionary