mario draghi : overview of economic and financial developments in italy concluding remarks by mr mario draghi, governor of the bank of italy, at the ordinary meeting of shareholders, rome, 31 may 2007. * * * ladies and gentlemen, i wish to pay grateful and affectionate tribute to the members of the directorate who left the bank in 2006 after decades of dedicated, rigorous and judicious work. they accompanied me in my first steps in this institution, providing the support of their loyalty and experience. vincenzo desario, who was appointed director general in 1994, served the bank in the exercise of highly sensitive functions, notably in the area of banking supervision. he led the bank on an interim basis after the resignation of antonio fazio. he stamped his mark indelibly on the bank ’ s approach to prudential supervision, principles of internal organization and daily administrative practices. the board of directors has named him honorary director general. pierluigi ciocca, who had been deputy director general since 1995, gave the bank the benefit of his profound, original thinking and his vast economic and legal knowledge. he promoted the study of law and economics, inspired research for many years and helped to refine the analysis of the functions of central banking. in 2006 the directorate acquired new members with expertise and experience, some of it gained abroad. fabrizio saccomanni, who as vice president of the european bank for reconstruction and development was in charge of risk management at that institution for three years, has been director general since october. ignazio visco, central manager for economic research and previously chief economist of the oecd for five years, and giovanni carosio, formerly central manager for banking and financial supervision, joined antonio finocchiaro as deputy directors general in december. the directorate ’ s new membership combines valuable experience in the international arena with intimate knowledge of the bank, analytical and research skills with specialization in the area of regulation and central banking. the bank ’ s new statute was approved last year. it modifies the operations of the bank ’ s decisionmaking bodies : the board of directors, the board of auditors and the directorate. it establishes the principle of collegiality for measures that have external significance. the bank intends to renew itself, and has already begun to do so. the reorganization taking place affects the functions of the head office, the branch network and the representative offices abroad ; it provides for the full integration of the italian foreign exchange office. the

regard, work to make sure that the public pays close attention to what the bank says. and such authority is not bestowed from the outside, but must be built up from within ourselves. it can be established only when we cultivate our abilities. our words and our will alone do not suffice. it also goes without saying that credibility must be underpinned by true ability. dear friends and colleagues, the crisis that the world economy is now undergoing is an abnormal situation. what is clear, however, is that overcoming it does not mean a return to the pre - crisis situation. the economy has a tendency to change dynamically, a characteristic that has been further reinforced by the modern trends of rapid globalization and informatization. there is a likelihood of risk and uncertainty growing greater the more dynamic the economy is, and at the same time spreading rapidly the more informatized it is. as the world moves closer to forming a single economy, we have learned the hard way that sectors have become much more inter - connected. we must redouble our efforts to adapt to changes, so as not to become estranged or left behind in this process of global transformation. efforts for policy adjustment between the united states and china to resolve the global imbalances, overcoming the challenges to euro system stability posed by the fiscal crises in some eurozone countries, the global wealth shift following the emergence of the g20 and the rapid expansion of asian economic powers, fixing the financial system so as to rein in economic risk and uncertainty, and redefining the roles of the international financial institutions : those are just a few of the core elements that will shape our drive to establish a new global economic framework. an appropriate solution to our country ’ s domestic problems can only be derived from the understanding of all these challenges. regrettably, however, we must bear in mind that there is no textbook solution to guide us in the future. we will be unable to find the correct prescription through approaches based upon our previous understandings of the economy. the current state of affairs requires that we respond wisely by thinking deeply and mustering all our wits to grasp the natures of the problems. international policy coordination may, on the one hand, currently be emphasized because the effects of particular policies adopted by any one country are limited in an open economy. this means that individual countries must cooperate with one another to maximize their policies ’ impacts. on the other hand, the current international policy cooperation may also have the positive result of reducing