for the stress test more complex ; this will have to be taken into account when interpreting and assessing the results of this year ’ s exercise, also with respect to previous years. as in 2016, no pass - fail threshold has been set. supervisors will use the results to carry out their supervisory review and evaluation process. while still low, the profitability of italy ’ s leading banks improved in the first nine months of last year. return on equity was 4. 4 per cent, compared with 1. 4 per cent in the same period of 2016. according to banks ’ expectations, profitability over the coming years should be sustained by a reduction in loan loss provisions, an increase in asset management fees, and a decrease in operating expenses. but an in - depth review of banks ’ business models is inevitable in italy, as it is throughout the eu. some important factors that could dampen profitability must not be underestimated. regulatory changes as well as any additional write - downs made in connection with the sale of npls could affect loan - loss provisioning. competition in the asset management market is bound to grow, as is the scale of operations necessary to be profitable. the costs for banks, which are burdened by persistently high staff expenses, will be affected by investments in new digital technologies, which have been limited so far but can no longer be delayed. moreover, the entry into force of new eu rules on the required loss - absorbing capacity in a crisis and on the provision of investment and payment services is expected to push up wholesale funding costs, competition for certain services, compliance costs and those related to ensuring that customers are fully protected. banks must therefore take action on several fronts to recover profitability and competitiveness. this means cutting expenses further, merging or entering into consortiums to exploit cost and revenue synergies, and investing in order to respond effectively to the challenges and opportunities brought about by the development of the fintech sector. increasing transparency towards customers must be viewed not as a legal or regulatory requirement but rather as essential to becoming more competitive. the provision of new products and services must ensure that customers fully understand the information essential for accurately assessing the potential risks and returns. the recent agreement on the completion of basel iii reforms, which will start to be applied in 2022 and enter into full effect in 2027, marks the culmination of the responses to the shortcomings in the regulatory framework that were highlighted by the global financial crisis. without raising the overall capital requirements significantly

. they would not help to promote fiscal discipline and could create higher costs in the long run. and they would do nothing to address the fundamental weaknesses in the greek economy. in short, the path of easy answers leads to stagnation, decline and an over - burdening of the young and future generations. from what i see today, i trust that the greek people know which path they need to take. a recent poll shows that 69 % of the public supports the euro – and being part of the euro means taking tough but necessary decisions. responsible choices and reliability are the preconditions for solidarity. greece has already received support from other euro area countries equivalent to 17, 000 euro per greek citizen. and, provided that it complies with the programme, those countries are committed to supporting greece until it regains market access. in short, all the conditions are present for greece to return to prosperity – and for the sake of both current and future generations, i trust that greece will make the most of them. bis central bankers ’ speeches