- term development plans. as a supervisory authority, we will continue to advise banks along this path, providing them with clear guidance and verifying that it is followed precisely. the banks ’ unwavering commitment to the prevention and combating of money laundering is essential to ensure both the integrity of the financial system and the sound and prudent management of intermediaries. banca d ’ italia regularly asks supervised entities to monitor developments and emerging risks. alongside traditional risks, connected, for example, with tax crimes and corruption, new ones are emerging : the pandemic has in fact provided additional opportunities for organized crime, exposing the economic and financial system to illegal and fraudulent behaviour, sometimes linked to the misuse of government support measures for the economy. innovative technological solutions, too, while helping to strengthen the safeguards and controls on financial flows, also open up new scenarios in which crime can occur, exploiting the weaknesses of a regulatory framework not yet fully harmonized at european level and not yet in step with rapid technological developments. the complexity and continuous evolution of these risks require effective and timely supervisory action. banca d ’ italia decided to strengthen its action by creating an autonomous structure, the anti - money laundering supervision and regulation unit, which reports directly to the governing board. the reform will also allow the bank to interact more effectively in the new european system under development. * * * in many countries, and certainly in the euro area, the high inflation that we continue to observe is one of the main economic consequences of the conflict in ukraine. the ecb governing council is determined to bring it back down to levels in line with its objective of price stability. reassuring signs that this could be achieved through a gradual normalization of monetary policy and without causing a sharp slowdown in the economy can be found in the medium to long - term inflation expectations, which remain broadly anchored to the target, and in wage growth, which at this time does not appear to point to the start of a wage - price spiral. for central bank action to be effective, it is crucial that there is no amplification of the cost of money in individual jurisdictions due to financial market reactions that are not justified by country fundamentals. if this occurs, it can be counteracted by decisively using, as in the past, all the tools possessed by the central bank and, if necessary, by employing new ones. for monetary policy to be fully successful, however, there must be a shared commitment, in practice,

##b has decided on two further rate increases of 50 basis points each. since november, the interest rate conditions applied to the third series of targeted longer - term refinancing operations ( tltro iii ) have also been made less advantageous for banks to ensure that they are consistent with the broader ongoing normalization process. this change in conditions led some counterparties to repay early 1 / 6 bis - central bankers'speeches the liquidity obtained in past years, leading to a reduction in the eurosystem central banks'balance sheets after years of strong growth. the balance sheet at the end of 2022, the bank of italy's balance sheet assets stood at €1, 477 billion, down by 4 per cent compared with 2021. ten years ago, ahead of the app and pepp purchase programmes, the balance sheet total amounted to around €600 billion. therefore, its size is very large compared with the past ; however, as a result of the ongoing normalization process, it is set to decline, at a faster pace from the current year onwards. securities purchased for monetary policy purposes continue to account for the bulk of the assets. this amount had reached €696 billion at the end of the year, of which about €630 billion was made up of italian government securities. compared with 2021, the total increased by €30 billion. assets held for investment purposes amounted to €147 billion compared with €150 billion in the previous year ; 84 per cent of these were public sector securities, 12 per cent were shares and investment fund shares, and the remaining 4 per cent were other financial assets. by contrast, refinancing operations decreased by €97 billion and stood at €356 billion at the end of the year. the reduction was largely due to early repayments of tltro iii operations as a result of the recalibration of remuneration conditions mentioned earlier. on the liability side of the balance sheet, these repayments were reflected in a decline in credit institutions'deposits, which fell from €406 billion to €246 billion. the decrease in deposits was countered by the €94 billion increase in the bank of italy's negative target balance, which reached €684 billion. the growth was mainly attributable to net sales of public sector securities by foreign investors and italian residents'investment in foreign securities. the outflows were partially mitigated by the increase in italian banks'net