the erosion of the geographical and product barriers between markets, the creation of complex and internationally ramified groups, the increasing competition between different types of intermediaries and the growth of securities markets have enhanced the investment opportunities available to vast numbers of small investors ; they have also called for a major effort to adapt the regulatory framework and the organization of supervision in order to protect the savings invested and the stability of intermediaries. the revision of the regulations governing the various financial sectors, partly in response to the process of harmonization within the european community, has eliminated the competitive inequalities between different intermediaries operating in the same markets, created instruments for exercising control in order to counter the risks arising from the new forms of organization of financial activity. in italy, the consolidated law on financial markets has responded to the problems posed by the new and diversified structure of supply by thoroughly overhauling the rules governing financial intermediaries and markets. [UNK] the statutory innovations will allow italian intermediaries to diversify and broaden the range of services they provide, adopt more flexible organizational structures and compete on an equal footing with foreign firms. the earlier legal framework restricted the scope for innovation, especially in the field of collective investment, where new types of investment funds could only be introduced by primary legislation. the extensive recourse made to secondary instead of primary legislation has removed the constraints on the diversification of products and services. in particular, the ministry of treasury is charged with the task of defining the principal characteristics of the various types of investment funds, with special reference to eligible assets ( listed securities, unlisted securities, real estate, etc. ), whether the fund is open or closed - end, and the nature of potential customers ( small savers or institutional investors ). the bank of italy is charged with regulating the management of investment funds ’ portfolios. in addition to the earlier tasks associated with the prudential supervision of undertakings for collective investment in transferable securities ( ucits ), it is now responsible for establishing the procedures and prohibitions for investment activity and for the limitation and diversification of risk. the most important innovation is the elimination of the separation between management on an individual basis and that on a collective basis with the creation of a single manager, the “ asset management company ”. investment firms, banks and trust companies continue to be allowed to provide individual management services directly, while asset management companies are allowed to provide both individual and collective management services on an exclusive basis. the possibility of operating

##ntial policies instead can rely on a broad set of instruments ( such as timevarying capital requirements, caps on ltvs, dtis, risk weights, etc. ) targeted at specific financial imbalances. national macroprudential authorities can address local risks, as has recently been done in a number of countries, without altering the monetary stance. against this background, let me emphasize that the key question is not whether monetary authorities should take financial stability issues into consideration – the answer is “ yes ” and they already do. the issue is rather whether the micro - as well as the macroprudential authorities take the macroeconomic implications of their policies fully into account. i recently argued that the interaction between monetary policy and micro - and macroprudential supervision is indeed an issue, and one that matters for two reasons. 7 first, even from the microprudential perspective ( and a fortiori from the macroprudential one ) there is a clear link between capital requirements, credit, and economic activity. this link is likely to be particularly important in bank - based financial systems such as the euro area. second, in and of itself slow growth poses a major medium - term risk for financial intermediaries. this implies that as long as there are no signs of generalized excessive risk - taking, it would be wise not to tighten the supervisory stance too much : this would guarantee that other stability - oriented policies do not undermine the efforts of monetary policy, delaying a recovery that banks need as much as firms and households. furthermore, when calibrating their interventions, supervisors should take into account the complementarity of micro - and macrosupervision, which rely on the same set of tools and similar transmission mechanisms. the overlap between micro - and macroprudential policies is particularly strong in economies with concentrated banking sectors, where the separation between “ micro ” and “ macro ” is tenuous. at a minimum, this complementarity gives macroprudential authorities in the euro area another reason not to be too restrictive ( micro requirements are already high ). beyond that, it suggests that microprudential authorities may borio and zhu ( 2012 ) ; jimenez et al. ( 2014 ), for bank lending. bekaert et al. ( 2013 ), for market finance. alessandri et al. ( 2015 ). see alessandri and panetta ( 2015 ). bis central bankers ’ speeches also want to reconsider their choices and ask