management of resources and to fuel uncertainty ; the scope for stabilization policies is limited. negative effects on the cost of the debt must be averted. it is important that the government and parliament decide, on the basis of the economic and financial planning document, measures for the next four years able to reduce current expenditure in relation to gdp, increase public investment and gradually diminish firms ’ tax burden. as requested of italy by the council of finance ministers of the european union, it is necessary to reduce the deficit below the threshold of 3 per cent by 2007. a return to higher rates of growth that are compatible with the available resources cannot be achieved without a renewed and effective commitment of economic policy to changing the structure of production. the reduction of the tax burden on businesses should facilitate the growth in size of firms, technological innovation and investment. the efforts to make the operation of public services more efficient and to create a more stable legislative framework need to be intensified. competition must be strengthened. firms must expand their scale of production, increase the professionalism of their managements, orient their specialization towards more dynamic and innovative sectors, and increase their presence in some technologically mature but high - quality segments of the international market. the financial system must assist firms in this difficult phase of transformation, directing resources towards the companies and projects with the greatest potential. the growth of pension funds will be of great importance for the financial market and for the supply of capital to the banking sector. the outlook economic activity probably reached a low in the first quarter of this year. the figure for gdp is expected to show an increase, albeit modest, for the three months from april to june. it is necessary that the still hesitant recovery gain momentum in the second half of the year. if it does, we will be able to avoid a contraction in gdp this year with respect to 2004, and to achieve growth of more than 1 per cent in 2006. the performance of gdp this year and next must be along these lines in order to give substance and credibility to the scenario projected for the public finances. as we underscored on 31 may to the general meeting of shareholders of the bank of italy, investment is finding it hard to gain momentum, consumer demand remains weak, and the outlook for exports remains uncertain even in a favourable international context. there is a need for a commitment by the government, the social partners and firms not to lose the opportunity to reverse our economy ’ s negative trend. thanks to the progress made in the last decade, banks

conclude with a few remarks on the topics addressed by these papers. two contributions are about investment funds. in recent years investment funds have been among the key drivers of the expansion of non - bank financial intermediaries ( nbfis ), which in turn account for virtually the entire growth in financial assets in the euro area since 2008. today nbfis hold more than half of total financial assets in the euro area. for central banks, the analysis of nbfis is therefore very important. recently, the non - bank sector has been carefully considered by the ecb in its strategy review, 18 which focused its analysis on how nbfis affect the transmission of monetary policy. as nbfis also have relevant implications for financial stability, they are constantly monitored by the fsb. 19 some of their fragilities became very apparent during the episodes of financial turbulence connected to the covid - 19 crisis. central banks and governments intervened promptly, avoiding an escalation. however, these episodes rekindled efforts to improve the macroprudential framework, to ensure that nbfis, and particularly investment funds, become more resilient to shocks. according to the international monetary fund, boosting the resilience of investment funds is a financial stability priority. 20 one of today ’ s presentations is about a possible new macroprudential tool : a joint stress - testing instrument that would yield an assessment of the stability of the investment fund sector and of the potentially destabilizing interconnections with banks. the other paper on investment funds will discuss how the money - market - fund reforms undertaken in the us spilled over to other jurisdictions by generating large re - allocations of money. this is another topic at the forefront of policy discussions : international cooperation aimed at avoiding regulatory arbitrage is a prerequisite of any effort to strengthen investment funds. the programme of the workshop includes several other very interesting contributions that use state - of - the - art technology ( including machine learning ) to analyse asset - pricing topics such as sovereign risk, the interplay between market inefficiencies and long - term investments, and the impact of macroeconomic trends on equity markets. all of these topics are important to central banks. correctly interpreting the evolution of market prices is essential for the conduct of monetary policy : central banks need to understand how their decisions affect asset prices, which in turn are a key source of timely information about agents ’ expectations. in particular, disentangling risk