BIS Review 168/2009  5  4. Supervision  The changes in the presence of foreign banks operating in Italy and in their business models have led to major alterations in the approach taken by supervision. These developments have been strongly influenced by the progress of international financial integration, above all in Europe.
In the single European market the principle of home-country control means that branches of banks from other member states are subject to a significantly different supervisory model from that applied to subsidiaries established under Italian law. Controls on the former are entrusted almost entirely to the home-country authorities, with the notable exception of liquidity risk, which is monitored by the host country.