fsb to develop macro - prudential tools, together with the bank for international settlements ( bis ), to identify and take account of macro - prudential risks across the financial system and limit the build up of systemic risk for regulated entities. moreover, the envisaged cooperation between the imf and the fsb for the conduct of early warning exercises will be crucial for the success of the global monitoring of systemic risks. second, we need to undergo global regulatory and supervisory repair. the basel committee has already set some milestones in this regard including the publication of the principles for sound liquidity risk management and supervision 1 and its current work on strengthening the basel ii capital framework. work is also underway concerning the development of measures to mitigate pro - cyclicality stemming from the regulatory frameworks, namely by building buffers in good times that can be withdrawn in less benign conditions. in this context, let me recall that the g20 leaders approved the recommendations by the fsb to address procyclicality, which are to be implemented by the end of this year. to this aim, the basel committee is developing proposals for countercyclical buffers and ways to promote provisioning over the cycle, with the aim to come up with concrete proposals by year - end. [ let me also mention some other important strands of work of the basel committee in the pursuit of strengthening the resilience of banking systems, such as the introduction of a non - risk based supplementary ( to regulatory capital ) measure, strengthening the quality of banks ’ regulatory capital and the review of the minimum level of regulatory capital with the aim to arrive at a total level and quality that should be higher than the current basel ii framework. for this last point, let me mention the importance that increases in the minimum regulatory capital, as a result of the aforementioned initiatives, “ principles for sound liquidity risk management and supervision ”, endorsed on 25 september 2008 ; and consultative papers on the enhancements to the basel ii capital framework, issued on 16 january 2009. should not take place in periods of economic and financial stress. this has been explicitly stated by the basel committee itself, but i would like to restate the importance of this point. 2 ] and third, regulatory gaps need to be closed. in that respect, the g20 leaders endorsed last april the extension of the regulatory net to all systemically important institutions, markets and instruments. these include systemically important hedge funds, credit rating agencies and over - the - counter

stability. even though the latter is certainly a precondition for price stability, this change could raise potential conflicts between the two objectives, undermining the credibility of central banks and the effectiveness of their policies. preserving financial stability should instead be the main task of macroprudential action. the same considerations apply to regulation and microprudential supervision : each policy can work well only if it has clear objectives and targeted intervention tools to achieve them. the deterioration in the international outlook has also had a strong negative impact on the italian economy : economic activity progressively weakened in 2018, recording a slight contraction – a so - called “ technical recession ” – in the second half of the year. overall gdp growth was just 0. 9 per cent last year, around half the level recorded in 2017 ; all the main international forecasters expect it to decelerate further this year. the slowdown of activity in germany, with which we share close economic ties, and the fall in business confidence, have been especially important factors in the weakness of aggregate demand and, especially, the marked deceleration in investment by italian firms. our surveys confirm that weak capital accumulation reflects greater cautiousness on the part of enterprises in the face of uncertainty about economic and political factors, and the persistent trade tensions. economic activity returned to slightly positive growth in the early months of this year : according to the preliminary estimate gdp increased by 0. 2 per cent in the first quarter of 2019. this trend could continue, especially if the global rebound in investors ’ confidence observed since late 2018 proceeds and continues to exert its effects in italy too. but to fully recover the path of sustainable growth, italy must tackle its two main structural problems : the stagnation of productivity observed since the 1990s and the high level of public debt. italy has been growing on average by around 1 percentage point less than the rest of the euro area since 1999. this is the result of the country ’ s delayed response to the big changes of our era : globalisation and the technological revolution. a short - lived relief provided by fiscal or monetary policy, albeit important, is not enough to solve this problem. to address it, italy must quickly adopt a consistent growth strategy combining measures to support innovation, with those to improve the quality of human capital, and to create a more favourable environment for “ doing business ”. following the double - dip recession associated with the two financial crises that erupted in the past decade ( the global financial crisis of 2007 – 09 and the euro