a comprehensive assessment like that held in 2014 for the banks subject to joint european supervision. at the italian banks classed in 2016 as significant, 34 inspections were made last year on behalf of the single supervisory mechanism, conducted mostly by bank of italy inspectors, and in the most important cases with the participation of staff from other member country authorities. another 11 inspections dealt with questions of transparency and money laundering at those banks. our inspectors also took part in checks at large foreign intermediaries. in exercising the powers and duties that the law assigns to the bank of italy in the area of banking products, in 2016 we reminded 90 intermediaries of the need for full and prompt compliance with the rules on transparency and correctness in customer relations. appropriate corrective measures were required and sanction proceedings initiated where necessary. as a result of these controls, banks refunded some €35 million of improperly debited fees to customers. the activity of the banking and financial ombudsman, to which the bank of italy provides organizational support, is expanding rapidly. in 2016 alone the ombudsman received some 22, 000 complaints and handed down 14, 000 decisions, three quarters of them in favour of the customer. although these decisions are not binding, in virtually all cases the bank abided by them ; this resulted in the refunding of another €13 million. the bank of italy ’ s controls in this area are complemented by our financial education initiatives ; we are taking an active part in the launch of a national financial education strategy. the revision of italy ’ s anti - money laundering regulations for implementation of the fourth european directive has now been completed. the new framework confirms the role and organization of the supervisory the governor ’ s concluding remarks annual report 2016 banca d ’ italia authorities and italy ’ s financial intelligence unit ( uif ). the unit ’ s position within the bank assures its independence and effective preventive action. in its ten years of existence our system has worked well, as is shown by the declining number and decreasing gravity of the criticisms raised in the course of inspections, the growing cooperation of financial institutions in reporting suspicious transactions, and the important contribution of the uif to investigative and judicial activities. given the high threat of terrorism, procedures for investigation and cooperation, including at international level, have been finalized to intercept and counter terrorist financing. today, italian banks are called on to change in order to bring profitability back up to adequate levels. this is the spirit in which they

financial income owing to the fall in interest rates. public investment fell from 3. 3 to 2. 4 % of gdp between 1990 and 1997. in a medium - term perspective, there are reforms, many of which have been initiated, that remain to be completed in order to curb current spending, above all on pensions and welfare, and to enhance the effectiveness of expenditure, especially for education and healthcare. – 8 – the efficiency of public services and the stock of infrastructure are not as high in italy as they are in the industrial economies with which we compare ourselves. it is estimated that 9 % of the workers in manufacturing industry are in an irregular position with respect to tax, social security and work safety rules. in the building industry the ratio rises to 34 %. irregular employment is much more widespread in the south, where in some sectors it reaches 50 %. at the root of the grey economy are insufficient differentials in labour costs between areas and firms with very different levels of productivity and profitability ; the phenomenon also leads to the evasion of taxes and social security contributions. through the black economy, the market tends to achieve a de facto closer alignment between labour costs and productivity. the improvement of competitiveness is to be pursued by increasing the efficiency of the public sector. it is important to proceed with the full operational implementation of the legislative reforms enacted. frequently, the limited project development capability of local authorities and the lack of coordination with central government are far from secondary causes of the slowdown in expenditure on public investment and the failure to use the funds and resources available. outlook at the root of the instability and recurrent crises of the world economy is the very rapid, at times chaotic, growth of finance, inconsistent with the growth in productive activity. this has consequences for the stability of exchange rates, the purchasing power of currencies, interest rates and securities prices. it has adverse effects on the financial position of banks and intermediaries, the business cycle and employment. the development of the international monetary system and its current configuration are the product of market forces. the institutional context does not permit quantitative limits to be set on the growth of flows. transparent and widely accepted prudential rules for the management of intermediaries are not always applied. the liberalisation of capital movements and finance has greatly contributed to the growth of worldwide investment and saving. the gains from the liberalisation of trade in goods and services are certain at the global level and not distributed too unevenly, thanks to the operation of relative prices