milano hub – results of 2021 call for proposals speech by alessandra perrazzelli deputy governor of the bank of italy 28 february 2022 welcome everyone. i am very pleased to be here today to present the results of milano hub ’ s inaugural 2021 call for proposals on artificial intelligence and to announce the names of the 10 projects that - after a rigorous review process - will participate in the bank of italy ’ s innovation centre. how did we get here? we received 40 projects submitted by 62 different operators : financial intermediaries, start - ups, service providers, universities, industry associations, research centres, consulting firms and law firms ( slide 1 ). the call was answered by young start - ups ( less than two years old ) and by italian and foreign banking, finance, insurance and commercial groups, including some listed companies. universities also feature prominently : 22 per cent of the projects submitted hail at least in part from the world of academia. the response to the call for proposals has been very positive. it has served as a further source of stimulation for the bank of italy in helping the financial system to face the challenges posed by the technological innovation process. the results of the call only go to show that innovation knows no boundaries, drawing together participants from across the financial ecosystem, regardless of size. this is also confirmed by the discussions we have had with the market through our other two innovation incubators : the fintech channel and the regulatory sandbox. in 11 cases, the applications were submitted jointly by two or more applicants, often from different economic sectors ( slide 2 ). these are projects that require the input of a variety of professionals, or that involve operators with traditional business models turning to fintech companies or specialized service providers for their know - how to improve processes and to adapt products. breaking it down geographically ( slide 3 ), 66 per cent of the projects come from the north of italy, 18 per cent from the centre, and 11 per cent from the south and the islands ; the remaining 5 per cent were submitted by foreign applicants. our interaction with these operators has shown that, while the distribution is uneven, nonetheless throughout the country there are plenty of even small entities with a significant wealth of knowledge and high - quality human capital that we should be tapping into increasingly. the projects submitted ( slide 4 ) stand out for their high quality and variety. this fully reflects the dynamism and complexity of the artificial intelligence sector, which is undergoing a period of strong expansion throughout the world.

to be left to national authorities in applying the criteria will have to be balanced by peer reviews starting at the end of 2012. sifis ’ ability to absorb losses needs to be improved in order to minimize the probability and systemic impact of a crisis ; the measures to this end include capital requirements additional to those laid down by basel iii. there are various possible techniques : higher ordinary capital ratios, the participation of some creditors in losses ( bail - in ) and debt instruments that convert into common equity on the occurrence of specific events ( contingent capital ). another field for action by the fsb concerns the “ shadow banking system ”. we are preparing a map of the non - bank activities and intermediaries that, insofar as they create credit and transform maturities, need rules and supervision similar to those of the regulated banking system. bis central bankers ’ speeches the new european supervisory bodies are now operational. the first task, in which the european banking authority will be primarily engaged, is to carry out stress tests on the leading banks. the tests will have to satisfy four requirements : very severe scenarios ; strict assessment of the results using a common methodology and backed by thorough peer review ; complete transparency ; and prompt identification of the remedial measures. the requirements are essential for the credibility of the exercise and the markets ’ assessment of the european banking system. harmonization of the prudential rules is the other urgent object to achieve. a set of common rules – the single rulebook – will help to prevent less strict supervisory rules and practices in one country from jeopardizing the stability of the european financial system, having repercussions on the economies of other countries and distorting competition. a first test will be the implementation in europe of the basel iii rules. all the countries of europe have pledged to transpose those rules into law, in keeping with rigorous principles, already present in our model of supervision, whose validity was confirmed in the course of the crisis. the european systemic risk board, charged with signalling areas of risk and making recommendations, will need to be able to accompany its analyses with effective intervention measures. it will avail itself of systemic stability risk assessments shared with the microprudential supervisory authorities. italian banks and the bank of italy ’ s supervisory action the money and financial markets are now functioning better, but the return to complete normality will take time. banks, particularly european banks, are having difficulty raising funds in the market. their balance - sheet assets are exposed to significant