The Bank of Italy, both at home and in international fora, is engaged in improving the regulatory framework and detecting the vulnerabilities and risks of banking and financial business. We shall continue to improve supervision. We must progress in our action to safeguard a system that so far – thanks in part to that action – has withstood the crisis better than others.
The first thing to say is that these changes to the inflation process are uncertain and it is unclear how long lasting they will be. Also, with long-term inflation expectations anchored at 2%, there remains broad confidence in the effectiveness of the current framework. We should therefore be cautious about making any recommendations for change.