##ability that allow the system ’ s capitalization to be increased while ensuring the ability to finance the economy. banks ’ governance and the role of the foundations more than two years have passed since the bank of italy, anticipating international developments, laid down rules on banks ’ governance. adequate debate and collegiality in taking strategic decisions, unity of managerial approach in running the business and an effective and aggressive structure of controls at every level are the essential elements of sound and prudent management. i take this occasion to underscore some guidelines for action in this field. the bank of italy does not interfere improperly with entrepreneurial autonomy. it does not pretend to dictate specific internal structures, especially for the largest and most complex banks. however, it does consider it necessary, whatever the structure chosen, that the chains of reporting and command be established unambiguously, that effective flows of information to and from the top be ensured, and that the responsibilities of the governing bodies and the individual managerial levels be set down in a transparent manner. one of the clearest lessons of the crisis is that the risk management function in banks must cover all strategies and transactions, dialogue authoritatively with the lines of business at every level, report directly, promptly and thoroughly to top management and the corporate management bodies. the corporate officers of banks with control tasks, who have particularly sensitive functions, must have professional expertise adequate to the complexity of assets and risks. the obligation to inform the bank of italy of every fact that might affect sound and prudent management must be complied with, on pain of sanctions. the delicate, specific responsibilities of directors and members of the control bodies of banks require adequate time and commitment. with this in mind, it is advisable to consider the possibility of rules limiting multiple office - holding. the italian experience of banking foundations is positive, not only for the important contribution they make to socially commendable activities, but also for the role they have played as stable, solid shareholders in banks ; a role filled in other countries by institutional investors, which are rare in italy. during the crisis, the foundations ’ long - term view of banks ’ prospects and their roots in the territory – factors driving development at local, regional and national level – were crucial. when other shareholders, such as investment funds, until the eve of the crisis so vociferous in demanding efficiency gains and changes of management, vanished, often for good, it was the foundations that subscribed for the repeated capital

work in italy fell by 560, 000 between the second quarter of 2008 and the fourth quarter of 2009, largely among fixed - term and part - time employees and persons who are formally self - employed but in almost every way have the characteristics of wage - earners. the first half of 2010 saw a sluggish recovery, with a gain of 40, 000 jobs. as in other european countries, the impact of the recession was attenuated by large - scale resort to short - time programmes. between september 2008 and august 2010 a total of 1. 8 million hours of wage supplementation were authorized, equivalent to about half a million full - time workers each year. from the onset of the crisis, the government extended eligibility for these benefits to additional workers. the unemployment rate has reached 8. 5 per cent of the labour force, including off - the - books workers. for a fuller assessment of the state of the labour market, many national and international statistical agencies also use other measures of underutilization of labour. in addition to the officially unemployed, such measures also count workers on short - time programmes like wage supplementation, discouraged workers ( those who want jobs and are available to work but have given up active search for a job because they have lost hope of finding one ), and those who have part - time but want full - time jobs. in italy, counting only the first two of these categories, the labour underutilization rate is above 11 per cent of the potentially employable, about the same as in france and higher than in the united kingdom and germany. * * * italy faced the crisis with a budget deficit still close to 3 per cent of gdp and a public debt that, though gradually diminishing, was still high by international standards. the response to the crisis was prudent, and the repercussions on the public finances were smaller than in other countries, thanks in part to the absence of bank bailouts. if fully implemented, the measures of the three - year public finance package approved in july, curbing current expenditure and reducing tax evasion, could bring the debt ratio back onto a downward path. the euro - area countries have responded to the recession of recent months both individually, with fiscal policy measures designed to contain sovereign risk and prevent contagion, and collectively, with new institutions and rules. this demonstration of cooperation, solidarity and firm resolve has consolidated the euro. though the process has not yet been completed, it has shown that the countries