term policy trade offs in an environment of very low or even falling inflation, the relative “ bluntness ” of the monetary policy tool and the often difficult situation in terms of available information and analysis, put certain limits to the use of monetary policy for financial stability purposes. moreover, market excesses and the pro - cyclicality of the financial system are also due to factors other than excessive credit growth and high leverage. consequently, other policy tools must be employed – notably regulatory policy instruments – by the supervisory authorities in order to reduce procyclicality and also limit the emergence of systemic risks in the financial system. this assessment is also compatible with tinbergen ’ s rule that, in case of trade - offs between objectives, policy makers need as many ( independent ) policy instruments as objectives, in order to fully achieve them. furthermore, the extraordinary nature and consequences of the financial crisis – and here i am referring both to how close we came to a global financial meltdown and to the overall costs of the crisis for tax - payers in terms of losses in output and employment – have painfully demonstrated the need for improving and broadening the regulatory framework, by strengthening both the micro - prudential supervision of individual institutions and the macroprudential supervision of the financial system as a whole. the current crisis has revealed a general under - appreciation of systemic risks in the existing framework of financial regulation and supervision, which tends to focus on the stability of individual institutions, markets and infrastructures. the crisis also revealed that macrofinancial factors, the inter - connectedness of markets and institutions and financial globalisation play an important role in determining the size, nature and propagation of systemic risk. therefore, it essential – and there is a broad consensus on this – to establish an effective framework for macro - prudential supervision that will ensure a systematic, allencompassing and integrated analysis of systemic risks as well as the formulation of appropriate policies to prevent address such risks. the macro - prudential approach to supervision focuses on the financial system as a whole and involves the monitoring, assessment and mitigation of systemic risk, namely the likelihood of failure of a significant part of the financial system. it is important to recognise that systemic risk is partly endogenous as it depends on the collective behaviour of financial institutions and their inter - connectedness, as well as the interaction between financial markets and the macroeconomy. macro - prudential policies aim to prevent, or at least contain, the build

in public debt ) ; and of monetary and other financial policies, which reacted promptly and forcefully to the mother of all exogenous crises, ensuring that financial meltdown and a 2008 - style downward spiral were avoided. last week, the imf released their updated projections on global growth. they now expect an expansion of 5. 9 per cent this year and 4. 9 per cent in 2022. for italy, the imf ’ s projection for growth this year has improved from 4. 9 to 5. 8 per cent, while for 2022 it has been confirmed at 4. 2 per cent. our own expectations are similar. many advanced countries ( and, among the emerging ones, china ) have already reached, or are about to reach, pre - crisis output levels. in italy, we expect this to happen in the first half of 2022. there is unavoidable uncertainty about such projections. the latest crisis was utterly unprecedented. one can never rule out the possibility, for instance, that the pandemic will take another nasty turn, or that investor attitudes will suddenly change. and some delayed bankruptcies may well occur with the end of moratoria and other provisions. 1 / 5 bis central bankers'speeches meanwhile, fast growth has resulted in production and distribution bottlenecks, which may yet restrain further expansion, and have already pushed prices higher. we discussed this issue at length during the g20 meeting last week, and there was agreement that such bottlenecks are still likely to be transitory. this means that the markedly higher inflation rates that have recently been observed throughout the developed world can also be expected to recede over time, in part given the absence, so far, of wage pressures. as governor visco said in his introductory statement to the press conference that followed the g20 meeting, “ inevitably, the widespread uncertainty surrounding the current situation requires central bank governors to monitor price dynamics closely ”. he also said that “ economic policies should remain supportive for as long as necessary ”. last year ’ s crisis hit disadvantaged groups such as low wage earners, women, and the young in a disproportionate way. it also hit small enterprises and the self - employed, though with an extremely variable intensity. certain industries, especially in services, suffered a much heavier shock than average. there is evidence that in many countries, including italy, fiscal support has been broadly effective in countering the sharp increase in inequality that would otherwise have emerged. differences remain