ignazio visco : opening remarks on infrastructures in cross - border payments digital and global opening remarks by mr ignazio visco, governor of the bank of italy, at the enhancing digital and global infrastructures in cross - border payments webinar, 27 september 2021. * * * i am pleased to open this webinar on “ enhancing digital and global infrastructures in crossborder payments ”, organized by the bank of italy in the context of the italian g20 presidency initiatives. its primary aim is to support the activities that are being carried out within the g20 roadmap on the enhancement of global cross - border payments that was published last october. these activities have been a top priority on the g20 agenda since last year and we are committed to their advancement. this two - day discussion intends to take stock of the progress made in implementing the roadmap and gather views on the way forward from a variety of parties, including policymakers, industry participants and academics. the approaching end of the g20 italian presidency is the ideal time for a comprehensive check - up. cross - border payments are considerably slower, more expensive, less transparent and less accessible than domestic ones. to an extent, this reflects the large number of stakeholders involved and the need to encompass more than one single time zone, currency, jurisdiction and regulatory framework. yet, in recent years, international payments have become increasingly important for the world economy, reflecting the expansion of international trade, and especially e - commerce, of international tourism and business travel, of migration and remittances. progress in cross - border payments is thus more necessary than ever. the improvement of cross - border payments has been at the top of the international agenda for many years. consider, for example, the action plan launched by the financial stability board ( fsb ) in 2015 to assess and address the decline in correspondent banking, the 2015 targets on remittances set by the united nations as part of the sustainable development goals, and the work carried out by the bis committee on payments and market infrastructures ( cpmi ) on correspondent banking and cross - border retail payments. despite these initiatives, however, the efficiency of cross - border transactions has actually worsened in recent years compared to domestic payments, where the improvements have been enormous, reflecting in particular the introduction of fast payments in several jurisdictions. only cross - border payments between highly integrated regional areas or within monetary unions seem to have benefitted so far from the major advantages offered by digital

( 2018 ), 2943 – 2982. these observations regarding the ability of firms to finance themselves in the post - crisis landscape emphasize the importance of facilitating the growth of market finance. apart from filling the void created by the contraction of the banking system, more developed market - based finance and the accompanying financial diversification will enhance the stability and the efficiency of both the financial system and the real economy. indeed, the complementarity of bank and non - bank finance and the need to further develop the latter have long been emphasized by banca d ’ italia and other european institutions, which have long encouraged efforts in that direction. a large body of literature supports this endeavour, arguing that firms ’ optimal funding structure is diversified, in the sense that it includes both bank and non - bank debt, and that diversification has positive effects on firms ’ growth. 5 a balanced mix of funding sources is also desirable from an aggregate point of view. cross - country studies suggest that economies that overly rely on bank funding may be characterized by lower and more volatile long - run growth than more market - based economies. 6 there is no question that healthy banks act as shock - absorbers in normal recessions ; but when recessions coincide with financial crises, as in recent years, bank - dependent economies are more severely hit than economies with a diversified financial system. in order to ensure a stable and adequate supply of financial resources to the real economy, it is therefore necessary that the deleveraging of the banking sector be accompanied by a greater role for the financial markets and non - bank intermediaries. institutional investors play a key role in this structural transformation. indeed, one of the most important drivers of the development of financial markets is the growth of the institutional investor base. it has also been recently argued, for example, that an increase in pension claessens, s. and l. laeven, “ financial dependence, banking sector competition and economic growth, ” journal of the european economic association, 3 ( 2005 ), 179 – 207. reinhart, c. m. and k. s. rogoff, this time is different : eight centuries of financial folly, princeton university press, 2009, cournede, b. and o. denk, “ finance and economic growth in oecd and g20 countries, ” oecd economics department working papers 1223, oecd, june 2015 and langfield s. and m. pagano, “ bank bias in europe :