to 2 / 7 bis central bankers'speeches allocate a larger share to investment funds and to ‘ shares and participating interests ’ ( respectively, 15 and 21 per cent, compared with 10 and 18 per cent ). just a small portion of investments in funds, however, are used to finance resident firms : domestic shares and bonds make up 5 per cent of the total assets of these funds, compared with 34 per cent in france and 14 per cent in germany. among the direct investments in ‘ shares and participating interests ’, those in listed shares account for 2. 4 per cent of financial wealth, half of the observed euro - area average. however, investment in participating interests, usually focusing on small, unlisted firms, is significant. this portfolio composition is largely a reflection of the structure of italy ’ s productive sector, characterized by numerous small firms, where owners and managers frequently coincide, and by the relatively limited number of listed companies. italy ’ s market capitalization - togdp ratio is less than 25 per cent, compared with almost 100 per cent in france, 50 per cent in germany and 40 per cent in spain. the meagre offering of liquid and negotiable instruments by italian firms curtails the role that the market could potentially play in financing the economy. this is a function typically performed by institutional investors and financial intermediaries such as open - end investment funds, which make their decisions on how to allocate their portfolio based on the principles of risk diversification and holding highly liquid shares. if savings are to be effectively directed towards supporting resident firms, action must be taken especially on the supply side of financial instruments. this would improve the likelihood of attracting foreign investment, thereby also reaping the benefits expected to arise from the development of a truly single capital market in the european union. some modest progress has been made recently. in 2019 and in 2020, despite the crisis, the value of bonds issued by italian firms, while still low by international standards, was equal to around €47 billion, compared with an average of €35 billion for the previous five years. the number of initial public offerings reached a historic high of 33 in 2019, and decreased to 21 in 2020, a figure nevertheless in line with the 2014 – 18 average. additional important steps forward must be taken to increase the capitalization and size of firms and to enhance their ability to innovate. what is needed is a streamlining of tax incentives, which have built up over time

’ speeches reinforce the role of eu - level institutions in the management of financial stability in the euro area. with significantly more diverse economies and financial systems, promoting greater regulatory convergence in asia is more likely to proceed on the basis of a set of shared principles for developing and maintaining sound financial systems, while providing for the unique and distinct legal, financial, social and economic structures of individual countries within the region. it will be important to have clarity around the key principles, an inclusive process in agreeing on these principles, and mechanisms that support their effective implementation in individual countries. under such an approach, individual countries will have the necessary degree of flexibility to tailor national implementation approaches to reflect the specific characteristics of their respective economies, while committing to uphold the essential regulatory and supervisory principles that underpin financial stability. with asia ’ s varied experience in weathering financial crises, in developing our financial systems and in implementing the various regulatory reforms, valuable lessons can be drawn from the region to advance the progress and development of our respective financial systems and of the region as a whole. seacen has had an instrumental role for more than 30 years in the efforts to share this knowledge and experience widely among its members through providing a platform for such information sharing and through its research, training and capacity building initiatives. today, seacen takes yet another important step forward in advancing this agenda with the launch of the seacen financial stability journal. we live in a world in which the management of financial stability is a highly complex undertaking, and its dimensions have continued to evolve in an environment that is rapidly changing. it is hoped that the journal will contribute ideas, perspectives and insights and thus generate the intellectual dialogue and discourse on financial stability issues. as a region, asia has many unique perspectives and experiences to share with others facing similar challenges in managing financial stability. i congratulate the seacen centre on this important initiative. i wish it every success and look forward to contributions from seacen members and from the other parts of the world. the journal can have a significant influence in drawing attention to the financial stability issues that are most important and thus contribute towards the thinking and responses on these issues. it is a process that should have an inclusive participation in this important agenda of financial stability. bis central bankers ’ speeches