and mariathason ( 2014 ) ). think of the benefits of global supply chains and global interbank networks for trade and financial risk - sharing. this provides a powerful secular incentive for non - decomposable socio - economic systems. moreover, if these hyper - connected networks do face systemic threat, they are often able to adapt in ways which avoids extinction. for example, the risk of social, economic or financial disorder will typically lead to an adaptation of policies to prevent systemic collapse. these adaptive policy responses may preserve otherwise - fragile socio - economic topologies. they may even further encourage the growth of connectivity and complexity of these networks. for example, policies to support “ super - spreader ” banks in a crisis may encourage them to become larger, and more complex, still over time ( haldane ( 2009 ) ). the combination of network economies, and policy responses to failure, means socio - economic systems may be less darwinian, and hence decomposable, than natural and biological systems. it is against this backdrop that a complex, socio - economic “ system of systems ” may emerge. this can defined as one comprising an interlocking set of individually complex webs ( ( gorod et al ( 2014 ) ). the system of system concept initially emerged for engineering and enterprise systems, which involved the multi - layered assembly of component parts. but it has since found its way into a number of other domains including military planning, ecological evolution, power grids, transport networks and neurological structures ( gao et al ( 2014 ) ). although still in its infancy, there are some general properties of a “ system of systems ” perspective that are worth bringing out. for example, kurant and thiran ( 2006 ) look at the behaviour of a particular topology – a layered complex network. specifically, they focus on the behaviour of transport networks with a two - layer structure. simulations of this network suggest that monitoring risk on a layer - by - layer basis is likely to understate significantly the risk facing each individual layer. layered complex networks may also be less robust to failure than might be apparent from assessing the resilience of each layer in turn. in other words, the risks in a layered network are strikingly different than the sum of their parts. the greater the complexity of each layer, and the stronger the correlation between layers, the greater is this vulnerability ( kurant and as an example, early tv sets were built in a non - decomposable way

##vency procedures is essential. streamlining processes such as collateral enforcement and speeding up judicial procedures significantly contribute to reducing npls. in a nutshell, all 1 / 4 bis - central bankers'speeches kind of impediments to npl workout should be removed. that was a very important lesson learnt during the past decade. to give you an example : in the early years of the crisis, it became evident that some kind of protection for the primary residence was necessary, to ensure social cohesion and the protection of vulnerable obligors. in 2010, the then government introduced a law that aimed to protect homeowners from foreclosure by offering protection to primary residences under certain conditions. however, some deficiencies in the design of the measure resulted in the erosion of the payment culture and encouraged the emergence of the so - called'strategic defaulters '. since then, greece has reformed its insolvency laws, making it easier for banks to recover assets. the new insolvency framework aimed to accelerate proceedings, reducing the time it takes for banks to recover funds from insolvent borrowers. in addition, the introduction of electronic auctions for foreclosed properties streamlined the process, allowing banks to recover funds more quickly and efficiently. banks also need to have an adequate npl governance function to deal with the problem. they should also have the proper capital and provision cushions to absorb the losses associated with npl management. the role of the supervisor is important here. continuous and rigorous supervision by authorities ensures that banks adhere to npl reduction plans. supervisors must monitor banks'progress and impose corrective actions when targets are not met. the ssm also played a critical role in pushing banks to offload their npls through the application of the so - called'prudential backstop'as a pillar 2 measure. facilitating the development of secondary markets for npls, where these assets can be sold to investors, is vital. this includes creating a regulatory environment that attracts investors and ensures transparency and fairness. on transparency, i would like to point out that having publicly available data on recoveries is useful ( i understand that such data is available in italy ). another important lesson is that it is impossible to address quickly the problem without a systemic solution for npls ( such as an asset protection scheme ( aps ) or an asset management company ( amc ) ). the design of the scheme is of equal importance, to ensure minimum impact on taxpayers. the clear benefit