While the policies did not prevent the Italian economy from falling into recession, they did keep the credit crunch from being still more severe and the fall in output even larger. 4. Strengthening the banking sector  A healthy banking industry is essential to maintaining a stable flow of financial resources to the economy, and to smaller firms in particular.
Strengthening banks’ capacity to absorb shocks has been a major concern of policy makers, regulators and supervisors. On the regulatory side, the changes have been far-reaching. Policy makers and the public are well aware of the international drive to improve banking prudential standards and to overcome the regulatory failures that had become glaring with the financial crisis. The effort is ongoing.