The precondition for the change in the Bank’s approach was the abandonment of the idea — widely held after the crisis of the thirties, not only in Italy and not only among central banks — that competition, or “excess” competition, caused banking instability and was antinomic with respect to stability.
On the contrary, and especially in the conditions of international openness typical of the Italian economy in normal circumstances, an inefficient banking system is bound to be prone to systemic instability, even though oligopoly allows it to be profitable.