in germany. however, the future does not so much hinge on the number of banks and bank branches, as on the composition of the financial system and the types of activities that banks undertake. i mentioned earlier that our financial system perceives firms as being overly indebted, especially towards banks but without them having benefited in terms of profitability. in order to increase the profitability of the italian banking system and make it sounder, counterintuitive events are necessary : firms must increase their capital and diversify their sources of financing in order to reduce the role played by banks in the financial system. signs of this are already apparent. the moderate expansion in bank lending to firms in recent years, despite its recent recovery, is also a result of this process. from 2012, firms ’ leverage ( the ratio of debt to debt plus equity ) has fallen, the share of bonds in total financial debt has increased and the share of bank lending has diminished in equal measure. changes in the composition of financing sources, initially limited to large industrial groups already active in the bond market, are now being seen among smaller firms as well. over the past few months individual savings plans ( pir funds ) have been introduced, i. e. instruments offering tax breaks and designed to channel investment directly towards italian firms. the experiment has thus far been a success, attracting a net amount of approximately €5 billion. special purpose acquisition companies ( spac ) are another relatively new addition to the market, with growing success : in essence they are small private equity funds that gather resources from a limited number of investors solely on the basis of the personal reputation of the promoters. the resources are used to purchase equity in a target company, to be acquired within a set time limit after the vehicle has been established. spacs are listed companies and serve to accelerate the listing of the target company. * * * it is not enough for italy to change the composition of its financial structure. banks must advance their business model by accepting and facilitating a narrowing of their traditional role. in the long run, regulatory and technological changes make the italian model of banking that prevailed in the ten years prior to the global financial crisis no longer sustainable. however, the transition to a new model is far from being free of obstacles and risks. for example, the immediate repercussions on employment of a rebalancing of the financial structure that lowers the share of the banking sector must be considered carefully, and tools to upgrade the skills of redundant staff

design of new products, consumer - testing activities, as well as distribution ; iii ) sound remuneration policies for sales staff, to mitigate the risk of perverse incentives for misleading the consumer. as regards supervision, since the establishment of a dedicated directorate in 2014, the bank of italy has been moving steadily from the assumption that more information is always better to a focus on salience as opposed to sheer quantity ; from mere disclosure to a broader range of issues ( including governance and strategy ) ; and from a box - ticking approach to an approach that includes cooperation and guidance. we have thus complemented our supervisory action by issuing guidelines to clarify supervisory expectations. this approach has proved to be fruitful in addressing issues that are highly significant for consumer protection, such as the remuneration of overdrafts and overrunning, the unilateral variation of contracts, the handling of complaints, and the conditions for consumer credit. for enforcement, we start from the assumption that customers harmed by unfair business conduct and non - compliance with regulatory requirements should be in a position to seek redress in a way that is simple, fast, and inexpensive. to this end, in 2009, the bank of italy established an alternative dispute resolution mechanism for the banking sector ( the arbitro bancario finanziario or abf ), which has proved to be effective, has become increasingly popular with customers, and has somehow become a benchmark for other regulated sectors. while the abf ’ s decisions are not binding, “ naming and shaming ” is applicable in the event of non - compliance and has proven an effective deterrent. furthermore, as financial services providers are required to take the abf ’ s decisions into account when dealing with complaints from their customers, this enforcement system contributes to increasing the overall fairness of contractual relationships in the banking sector. finally, a few remarks on financial education. while regulation and supervision may help to address indirectly some of the major flaws in consumers ’ choices, there is broad consensus that the empowerment of consumers also requires strategies aimed at increasing their basic financial knowledge. nowadays people are probably facing increasingly complex financial decisions more often than at any other point in humankind ’ s history. ageing and the evolution of welfare imply an enhanced role for life insurance and private pension schemes. the increased range of financial investment choices provides better potential opportunities, but may appear baffling to non - experts. technological development in payments are transforming, beyond recognition, the way we conduct even the most