in business models and a recovery of profitability. internationally, the authorities are determined to complete the reform of the rules on banks ’ prudential requirements ( basel iii ) as soon as possible ; their intention is to avoid at the same time significantly increasing overall requirements. finalizing the reform will help to dispel the regulatory uncertainties that currently hamper the process of consolidation. the governance reforms introduced recently in italy facilitate this process ; they are starting to bear fruit. other such operations will follow the important merger of two ( former ) cooperative banks completed in recent weeks. the transformation into joint stock companies of the cooperative banks affected by the 2015 reform must be completed by the end of this year ; it should help them to strengthen their capital, restore profitability and improve credit quality. as regards mutual banks, the reform envisaging the creation of cooperative banking groups makes their strengthening much easier ; it should be implemented without delay. * * * the difficulties facing the italian banks will be solved all the more easily the sooner the economic recovery gains a firm footing : non - performing loans will be disposed of more quickly and the recovery of profitability will be less complex. the improved economic outlook would make it possible for saving to fund business investment. for the economy to return to a path of stable growth, however, capital accumulation must, crucially, resume at a more vigorous pace. the measures set out in the ‘ industry 4. 0 ’ plan announced by the government will provide further impetus for public support to firms ’ innovation and investment activity. this action is part of a broader reform strategy that has been taking shape over the years. important measures have been implemented and are now yielding their first results. the only option is to continue resolutely along this path in order to provide a better working environment for firms, assist the creation of new job opportunities, and reduce the imbalances weighing down our economy and our society. designed and printed by the printing and publishing division of the bank of italy

michael c bonello : the central bank of malta and financial stability speech by mr michael c bonello, governor of the central bank of malta, at the conference “ onshore europe ”, organised by the malta financial services authority, st julians, 13 september 2004. * * * the title chosen for this conference is as significant as it is brief. the two words “ onshore europe ” neatly capture malta ’ s current reality, that of a financial centre with solid credentials which affords its players both the guarantees and the opportunities to be offered by the single european market for financial services. as we commemorate malta ’ s first ten years as an international financial centre, it is appropriate to record that if we are able to look back with satisfaction at past achievements, it is only because our legislators had the political vision to adopt a consensual approach to the task at hand in 1994. this involved a radical overhaul of existing laws and the drafting of new ones to lay the foundations of a modern financial centre governed by the highest standards and yet flexible enough to allow new opportunities for growth and development to be seized to the country ’ s economic advantage. i would, therefore, like to pay tribute to all those who saw the project through to a successful conclusion. an analysis of malta ’ s track record leads to another important conclusion, which is that having in place an appropriate legislative and institutional framework is a necessary, but not a sufficient condition for success. recent experience around the world suggests that the potential of a financial centre cannot be maximized unless it possesses another essential attribute. that other ingredient is stability and it is this aspect that i propose to explore today. ensuring financial stability is a statutory responsibility of the central bank of malta. the bank is thus obliged to participate actively in the maintenance of a stable and efficient financial system and to contribute towards its development. this applies not only to the payment and settlement system, of which the bank is the regulator, but to the entire financial system. the bank has an on - going role to play in assessing the robustness of the system. it must draw attention to any problems and ensure that these do not in any way impede the functioning of the financial markets as efficient providers of capital for companies and households. the bank ’ s approach is therefore to consider the general risks to the system rather than the situation of individual credit and financial institutions. the latter is the task of the malta financial services authority ( mfsa ), which has successfully assumed, over the last ten