giuseppe grande and fabio panetta ( 2014 ), “ the negative feedback loop between banks and sovereigns ”, banca d ’ italia, questioni di economia e finanza ( occasional papers ), no. 213. bis central bankers ’ speeches to studies by the bank of italy, the overall effect on italy ’ s gdp of the measures i have listed can be estimated at a little less than three percentage points in the two years 2012 – 13. 21 these measures also highlighted the operational autonomy of the eurosystem, which was able to bring a wide array of instruments to bear on the different manifestations of the financial crisis, selecting the most suitable one case by case. however, the success of the ecb ’ s extraordinary measures must not make us forget the difficulties that monetary policy in the euro area has faced in recent years. the global financial crisis and the sovereign debt crisis have brought risks for the eurosystem ’ s de facto independence that it would be naive to ignore or underestimate. i will mention two of them. the first concerns financial autonomy and derives from the fact that the unconventional measures have expanded the size of the ecb ’ s balance sheet, though far less, at present, than those of the us federal reserve and the bank of japan. the quality of the securities held or accepted as collateral for bank refinancing has declined. in principle, monetary measures of macroeconomic stabilization can produce both losses and profits for the central bank adopting them. 22 but if a central bank made losses, its reputation would be endangered 23 and its ability to pursue its objectives could be put in doubt ; ultimately, there could be mounting political pressure to reduce its independence. this is especially true in the case of the eurosystem, which not only manages a currency without a state but finds itself facing a multiplicity of states which in these years of crisis have become more sensitive to what divides them rather than strengthening what unites them. the second, and far more important, risk consists precisely in the incompleteness of the european construction. some are calling for amendments to the treaty in order to expand the ecb ’ s mandate. 24 in particular, on the american example, it is urged that the objective of price stability be flanked by an explicit objective of equal status in terms of unemployment or employment levels ; and that the ecb be allowed to purchase government securities directly at issue. naturally it ’ s not up to me, a central banker, to say what objectives the political

economist at the oecd, the asian crisis of 1997 - 98 unfolded, spreading to russia, brazil, argentina and other countries. the great moderation of the 1990s and early 2000s provided some respite. but italy's performance was poor, hampered by low productivity. ignazio was aware of the scale of the problem, and he initiated and led a major collective effort to identify the reasons for italy's malaise. the results of this research are well documented and widely accepted today. ignazio joined the governing board of banca d'italia in 2007, on the eve of the global financial crisis. and he became governor in 2011, during the eurozone sovereign debt crisis. 1 / 3 bis - central bankers'speeches ignazio and i worked together closely during this period. the crisis forced us to talk more about spreads, deficits, and non - performing loans than about productivity. and events moved so quickly that we did not have time to delve into these issues as much as we would have liked. in essence, it was time to act, not speculate. in spite of the pressure, or perhaps because of it, our interactions were always calm, stimulating and productive. of course i am not in a position to give an impartial view of what we have done together, but i do believe that the work carried out by banca d'italia has been extremely valuable in many areas, both domestically and at european level. at the end of 2014, the risk of deflation appeared on the horizon. a broad, persistent price decline put the ecb in a situation it had never faced in its short existence. nevertheless, the response was swift, creative and effective. i do not want to praise the central bankers in this room too much, but i believe that, on balance,'unconventional monetary policies'have been a success. as famously stated by ben bernanke, these measures do not work in theory, but do work in practice. i am sure that this is a lesson that will remain useful in the future. in 2018, with the risk of deflation and italy's banking problems largely under control, ignazio dared to publish'difficult years': a retrospective book wrapped in a thin veil of optimism. some of his readers were quick to point out that the following years could be even worse. well, they were not wrong. the last part of ignazio's mandate saw a truly exotic mix of shocks