unexpected. in this regard, important steps forward have been taken. since the beginning of the gradual reduction of monetary accommodation, one - year overnight index swaps have picked up from negative levels to 3. 3 per cent, while ten - year ones have gone from barely positive values up to 2. 6 per cent. in real terms, using index - linked swap rates as a deflator, the interest rates currently stand at about 0. 9 and 0. 3 per cent respectively, from around - 4 and - 2 per cent at end - 2021. monetary tightening can now continue with suitable caution and with careful consideration of the implications for the economy and for the inflation outlook of the measures already adopted as well as of the information on how they develop. in any case, it remains essential to continue to balance the risk of an excessively gradual recalibration, which could cause inflation to become entrenched in expectations and in wage - setting processes, with the risk of monetary conditions becoming too tight. this in turn would result in significant repercussions for economic activity, financial stability and, ultimately, medium - term price developments. as i have recently said, i believe equal weight should be assigned to both risks, in line with the symmetrical price stability objective which we must achieve to fulfil our mandate. however, price stability does not depend on monetary policy alone, but also on firms'business strategies, agreements on labour costs and fiscal policy. in order to bring inflation back to its target, it is crucial for representative of workers and employers in all euro - area economies to make responsible decisions, to ensure that price and wage dynamics remain consistent with preserving monetary stability. in real terms, wage growth is limited by the performance of productivity. especially in italy, where both productivity and real wages have stagnated for too long, the investments and the reforms envisaged under the national recovery and resilience plan will play a fundamental role in creating a more favourable business environment. price stability also requires that public finances be kept under control in all countries. balanced policies are required, not only to prevent demand from overheating and inflation from declining more slowly, but also to stave off the risks associated with a negative perception, even if not entirely warranted, of the sustainability of public finances. fiscal policies, through temporary and targeted measures, can certainly help ease the effects of inflation on the weakest sections of the population ; however, this should be done through a redistribution among income earn

, and the accent began to be placed on government failures. governments, central banks and other regulators were blamed for failing to prevent those developments. this eventually led to an ideological swing : a push to reduce the magnitude of state intervention. the failures of the “ regulated economy, ” the pace of technological advance and the rapid expansion of international trade after the end of the cold war fuelled a protracted process of financial deregulation that was halted only by the financial crisis that broke out in 2007. the latter triggered a move toward re - regulation – or better regulation – that is still under way. the pendulum keeps swinging and will certainly continue to do so. ● but despite the negative perception of banking and finance, blind backlash is a danger to be avoided. as amartya sen argued, finance is essential to the functioning of the real economy. and i share dr reddy ’ s view that finance is a force for good. it is crucial for sharing and allocating risk, especially for poorer societies and people, insofar as risk aversion decreases with wealth. it is crucial for transferring resources over time and removing the liquidity constraints that hamper the economy and the exploitation of ideas. it is very important in promoting economic growth, especially by fostering innovation. we have countless historical examples of good financial innovations. think, for example, of the “ letters of exchange ” introduced by italian merchants in the middle ages : they were probably the first fiduciary money, and trade benefited enormously from this financial instrument. more recently, consider the development of “ micro - finance ” in the 1970s : an innovation that has enhanced financial inclusion, helping poor borrowers to smooth their income and cope with illness or other temporary shocks. and, in the last two decades, recall the role of the “ venture capital ” industry in the promotion of successful innovative corporations such as apple, intel and google. i would now like to offer a few thoughts on issues related to what has gone wrong in the financial system in the last few decades. i will consider four points : ● financial market participants tend not to be aware of the fundamental nonstationarity of economic developments. the wave of financial innovation in the 2000s was fuelled by the idea, in principle correct and fruitful, that the proliferation of new ( and complex ) financial instruments, allowing agents to insure against many dimensions of risk, was a way to “ complete the markets ”, to get closer to the theoretical arrow - debreu world,