The fundamental responsibilities of the Bank of Italy for monetary policy within the Eurosystem and for supervising the national banking and financial system are well known. At the same time the Bank is a complex organization providing services that benefit both intermediaries and the general public. We administer the resources entrusted to us with diligence.
Of course, this same leverage and risk-taking also greatly increase the possibility of bank failures. Without leverage, losses from risk-taking would be absorbed by a bank’s owners, virtually eliminating the chance that the bank would be unable to meet its obligations in the case of a “failure.” Some failures can be of a bank’s own making, resulting, for example, from poor credit judgments.