the quality of customer relation arrangements. sanctions are of course an essential deterrence tool, and ( again, differently from prudential supervision ) may be complemented by the power to impose the reimbursement of sums unduly charged ( which directly favor damaged consumers, differently from sanctions ). product intervention powers may further enrich the supervisory toolbox, preventing harmful products from being distributed. in addition to public enforcement, effective customer protection may also be based on private enforcement tools. complaint management, and effective alternative dispute resolution ( adr ) schemes enabling customers to seek redress, represent relevant tools. public authorities may have a role in establishing, or at least promoting, adr schemes for the financial system. last but not least, financial education programs may obviously complement regulation and enforcement in ensuring effective consumer protection. overall, the work of finconet over these years has become extremely relevant in supporting the comparison and evaluation of supervisory instruments, the dissemination of good practices, the analyses of critical issues, the formulation of policy proposals. the bank of italy has also devoted a great effort to the development of a comprehensive consumer protection framework in the italian banking system. in 2009 we established a banking ombudsman. in 2014, we established a new directorate responsible for business conduct supervision and in charge of financial education initiatives. since then, we have issued several guidelines for financial intermediaries ; the ombudsman scheme has given solutions to a very large number of complaints filed by customers ; banks and other financial intermediaries reimbursed over € 300 million to customers ; our financial education activities reach more than 100. 000 students every year. however, despite the steps taken so far, we are aware that we are still in the “ early age ” of business conduct supervision. that is why finconet meetings are important : we believe that comparing practices, sharing knowledge and experiences are essential to ensure financial consumer protection. the agenda of this two days meeting is very rich. you will be able to analyze and exchange views on several relevant issues : the tools available and their effectiveness, the evolving context in your respective jurisdictions, the use of new technology in market conduct supervision. new technologies in the financial system challenge regulators and supervisors, they open up new streams of products and services in a fast - changing market. the rise of “ open banking ” and the increased accessibility of bank accounts by third parties represent the most visible innovations in this field and are already contributing to reshaping the financial landscape. conduct supervisors

to improve. in the second quarter of this year the flow of new non - performing loans fell to 2 per cent of total lending, a level consistent with the average observed in the years prior to the global financial crisis. the stock of non - performing loans is also decreasing rapidly : net of write - downs, in june it had fallen to €150 billion, equal to 8. 4 per cent of total loans, from the peak of €200 billion, or around 11 per cent of total loans, reached in 2015. the ratio of bad debts to total loans has declined from 4. 8 to 3. 9 per cent. over the next few months, disposals and securitizations already under way and those recently announced by a number of banks will further drive down the stock of npls, which, net of existing write - downs, should fall below 8 per cent of total loans in the early months of 2018. banks ’ balance sheets need to be further bolstered to make them better able to withstand, now and going forward, the risks still weighing on the economic outlook. banks are responding to this also by referring to the ecb ’ s ‘ guidance to banks on non - performing loans ’ issued in march 2017. the measures to reduce the burden of non - performing assets announced last july during the european council are a step in the right direction. this is also the aim of the introduction, which should be gradual and properly calibrated, of a calendar approach to write - downs for future non - performing loans. the reforms passed in italy in recent years have shortened the duration of credit recovery proceedings ; there is room for further action. the recent passage of the enabling law laying the ground for a comprehensive reform of legislation on corporate crises and insolvency proceedings will provide a major contribution to this. the principles and criteria set out in the enabling law must be implemented and translated into rules that can truly speed up credit recovery times, preserving as much as possible the value of companies that are still in sound condition. banks must make full use of the tools that have recently become available in the domain of out - of - court settlements with firms for the restructuring of debts and the transfer of assets. moreover, having suitable and timely data on npls is indispensable for more effective internal management and to facilitate their sale on the market at adequate values. despite the improvement observed following the survey we launched last year, banks still need to make progress in this area too. the