of the sector in plausible, narrated stresses, and identify sector - wide risks. this serves our accountability and can enhance confidence in the capacity of the insurance sector as a whole to continue to support the wider economy through provision of essential financial services. we should also think about whether it will be valuable in the longer term not only to give a sector view but a firm - specific view as well. in stress testing the banking system through the annual cyclical scenario ( acs ), the bank publishes the results for the seven participants. the objectives for the acs test include improving firms ’ risk management and enhancing market discipline, with confidence in disclosures contributing see discussion paper'the 2021 biennial exploratory scenario on the financial risks from climate change'( december 2019 ). all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice positively to access to capital markets. publication has been helpful in cementing the integrity of the exercise and being part of the regulator ’ s accountability. these are valuable benefits, and the current consideration of both the future regulatory framework and the review of solvency ii, on which hm treasury recently published a call for evidence, suggest we should look carefully at both what we are seeking to achieve, why, and how. solvency ii review, internal models and the solvency capital requirements calculation having mentioned the solvency ii review, i do not propose to try and cover the many topics that it encompasses. i do want to talk about one aspect which risks being overshadowed by the familiar headline topics of risk margin, regulatory reporting, and matching adjustment. that is, the overall approach to setting capital requirements, and the potential role of sector - wide stress testing in that. under the existing implementation of solvency ii, there are many firms for which the standard formula is not appropriate, and internal models are the near - exclusive determinant of capital requirements for all or part of the business. and those models either have to be approved or, if not, rejected in their entirety, using a bottom up approach of assessing compliance with a large number of technical tests and standards. the philosophy is, in effect, that everything can be modelled, and that determining capital adequacy is essentially a technical exercise. this denies the reality : first that some risks are simply not conducive to modelling ; and second that even for those that are, there will always be a chance that the model is wrong.

equanimity and solidarity to the problems raised by the influx of immigrants who reach land in this area. hospitality, open - minded acceptance, rules, controls, law and order, and far - sightedness are closely related aspects of the attitude towards immigrants in search of better living conditions and a more advanced social and human context. today, more than ever before, globalization demands that we pay attention to events beyond our own borders, and not only in the economic field. immigration can be a positive force, particularly in view of the demographic problems facing us, and we should keep an open attitude towards it, provided its negative aspects are tackled and its legality is assured by creating the conditions required for security. 2. this morning, in lecce, i had time to consider the economic outlook for the regions of southern italy. today ’ s guests include representatives of the business world and the professions. firms, all firms, are indispensable and powerful forces of economic growth. a business culture, a drive to improve production techniques, innovate, and manufacture better goods with more value added are crucial for the progress of the productive fabric. although the south of italy has experienced periods of exceptionally fast economic and civil modernization in the past fifty years, it continues to be a national problem. the economy of the south has opportunities and potential. there must be a drive to accelerate the process and overcome dualism, with italy ’ s public institutions, corporate sector and social partners all contributing. the south of italy is hampered by poor infrastructure ; this shortcoming, and particularly the lack of transport and service networks, affects production, which is thus less competitive than in the regions of the centre and north. an additional boost for public works and infrastructure investment is likely to stimulate aggregate demand and create good prospects of recovery. an increase of productivity and competitiveness in the south of italy necessitates an efficient and effective public administration and conditions of safety and legality. moreover, a problem of solidarity exists between the regions of italy with regard to making good use of the institutional and functional forms of decentralization. the available labour force, particularly of young people, and the cultural and environmental resources of the less developed regions constitute a “ reserve ” that can be tapped for growth, to the benefit of the whole of italy ’ s economy and society. technical and scientific capabilities are crucial for governing transformation and avoiding marginalization. basic and applied research play a leading role in international competition, process and product innovation, and