project, though innovative, could not represent a point of arrival. 18 the need to make the system more cohesive calls for projects from 2000 to 2008 a fifth of the growth in lending concerned customers acquired in new districts ; moreover, loans to firms with over 20 employees rose from 46 to 61 per cent of the total ( a proportion that has since stabilized ). see the speeches “ il credito cooperativo : le sfide di un modello ” and “ il credito cooperativo del domani : sviluppo, efficienza e solidarieta ” by the then deputy director of the bank of italy, anna maria tarantola, to, respectively, the annual meeting of the italian federation of mutual banks ( november 2009 ) and the xiv national congress of mutual banks ( december 2011 ). ignazio visco, “ borghi, distretti e banche locali ”. presentation of the volume civilta dei borghi : culla di cooperazione ”, rome, 20 november 2012. bis central bankers ’ speeches of broad conception that take account of the experiences of the mutual and cooperative banking systems in europe, which are characterized by a high degree of integration. the bank of italy is open to a discussion of the different options, including as regards regulation. conclusion the italian economy is at a difficult passage in which cyclical weaknesses are overlaid on unresolved structural problems. the country ’ s growth potential is diminishing ; the loss of jobs, particularly among younger persons, and the reduction in households ’ purchasing power are breeding discouragement and depleting human capital. there is no room to support growth through deficit spending. the large burden of the public debt and the tensions in the financial markets do not allow it. some measures, discussed in the governor ’ s concluding remarks to the bank of italy ’ s annual meeting, can assist a struggling productive economy and bolster the prospect of cyclical upswing. but above all we must resume, with the contribution of all the country ’ s best talents and resources, the reform programme begun in the last two years. we can no longer postpone modernizing our productive structure, our education and research system, the functioning of public administration. the obstacles to competition and innovation must be extirpated in all sectors. the rationalization of public expenditure, its reallocation towards more productive uses, must permit a sharp reduction in the tax burden on our economy. the banking system must play

. i have no quick or easy solutions to offer. but what we should do, in my view, is to more systematically encourage more research on these important matters. central banks are not innocent bystanders in this process. we have to be mindful about the 4 / 6 bis central bankers'speeches impact of our own decisions on the future of financial structures. digital currencies, for example, could undermine commercial banks ’ monopoly on creating inside money. 15 negative interest rates, meanwhile, can have adverse consequences for banks ’ profitability over time despite being extremely effective in complementing other non - conventional monetary policy instruments and helping central banks overcome the zero lower bound constraint. so far, the general equilibrium effects of negative rates have clearly dominated. more generally, it is hard to believe that central banks keeping very large balance sheets for a considerable amount of time will not have an impact on financial intermediation. looking forward, low productivity and ageing societies may mean that our economies have gravitated towards a low growth, low interest rate environment that may weigh more permanently on banks ’ profits and, hence, financial stability. monetary policy, in turn, may have to resort more often to non - standard measures to meet its price stability mandate. in these circumstances, we need to be mindful of risks to financial stability. a too protracted period of asset purchases, for example, may cause financial imbalances to build up with potentially adverse consequences for price stability. conclusion let me close. preserving financial stability has become a much more complex and intertwined endeavour than it was 10 or 20 years ago. these interconnections can profoundly change the balance of regulatory trade - offs across major financial market participants. what is more, the financial system is evolving quickly. intra - temporal trade - offs are made worse by appreciable intertemporal trade - offs, where policymakers need to keep a watchful eye on the allocative repercussions of their regulatory decisions. in this environment, there are no quick fixes or easy solutions. but there are two principles on which we should continue to build. the first is cooperation among regulators, both within and across borders. only by joining forces will we be able to break up remaining silos and identify common solutions to the challenging trade - offs we face. the second is cooperation across policymakers. conferences like this one bring together policymakers from different fora – monetary policy, fiscal policy and financial stability. they force us to