of macroeconomic stability. achievements made both in the fight against inflation and in easing the budget deficit and public debt were only made possible with great effort and sacrifices. however, the road ahead calls for more effort. we have to use our resources more efficiently in order to converge with the developed countries. to that end, investments in human capital aimed at improving the quality of the labor force in our country should be intensified and competition should be enhanced through effective regulations and implementations, especially in the goods market. the competition authority is one of the main institutional building blocks of the “ open economy growth model ” implemented in the period after 1980 and is based on strengthening the market economy. competition policies and price stability, which is the core objective of the central bank, are strongly related. in an environment where competition conditions are ensured, monopolistic market behaviors will not be possible. simplifying the entry and exit of firms to the various sectors and increasing transparency are the main factors preventing pricing habits that are based on a high profit margin. additionally, due to pressures from both domestic and foreign competition, firms choose to implement strategies with the aim of increasing productivity, which in turn triggers innovation and technological development and contributes to the acceleration of the potential growth rate of our country. if firms increase profitability through measures that decrease costs instead of increasing prices, our country can reach higher growth rates in an environment of low inflation. various instruments can be utilized to establish an effective competition environment in an economy. the most outstanding of these can be listed as : establishing macroeconomic stability, liberalization of foreign trade, facilitating firms ’ – including companies owned by nonresidents – entry into and exit from sectors, easing tax and other public burdens, establishing an effectively - operating regulation - supervision structure, preventing unregistered economic activity, ensuring transparency and preventing monopolistic behaviors by reinforcing the regulatory and supervisory institutional structure, ensuring transparency in the public purchases of goods and services and ensuring an effectively - operating judicial system. significant progress has been made in these areas recently. however, there still is more to be done. i believe that the concept of competition should be explored not only using general indicators but also at the level of sub - items. achievements have been made in lifting the hurdles before the liberalization of foreign trade and entry / exit of new firms to the sectors. however, the studies conducted by the central bank show that the foreign competition pressure exerted by imports is not enough to reduce the price - cost margin in

substantial part of the banking industry in many european countries. overall, the cooperative banking sector in the european union counts more than 4, 000 local and regional banks, 62, 000 branches and 49 million members, with a significant incidence in their national markets. 2 although comparing international data involves some difficulty, we can put cooperative banks ’ market shares in terms of number of branches at about 60 per cent in france, 50 per cent in austria, 40 per cent in germany and the netherlands, and 10 per cent in spain and portugal. 3 in italy, the figure is 39 per cent for the entire cooperative banking sector. in the other european countries, cooperative banks have developed mainly in a context, including the legal and institutional framework, in which central organizations play a driving role. in italy, by contrast, the movement has been marked by greater differentiation between mutual banks ( banche di credito cooperativo ) and popular banks ( banche popolari ), with less integration and autonomous paths of development being preferred. each model has its strengths and weaknesses. close coordination at central level can help overcome constraints and inefficiencies due to the small size of individual cooperative banks. on the other hand, in banking as in other industries, entrepreneurial autonomy fosters competition, the quest for innovative solutions, and the ability to adapt to the needs of local economies. 3. support for the economy the presence of a varied range of intermediaries constitutes an asset for the italian banking system and has proven invaluable for the country ’ s economic growth. in particular, thanks to the social and solidaristic concerns inherent in their corporate model, italy ’ s cooperative banks not only assist categories of customers at risk of exclusion from the credit market and thus vulnerable to usury, but have also actively sustained specific segments of the market, such as small and medium - sized enterprises. it is on the basis of these premises that italian legislation has always safeguarded the particular characteristics of cooperative banks in their various forms. banche popolari are the most important expression of italy ’ s cooperative banks in terms of assets. a particularly topical debate today concerns the effects that the rapid expansion of some of these banche popolari may have had on their inclination to support local economies – in particular, the maintenance of close relationships with their reference customers ( households, professionals, artisans, smes ) – and on management ’ s incentives. the empirical evidence testifies to their close ties with local economies and their role in