The role of the banks and supervision during the transition  In recent years the Italian banking system has strengthened its capital position. Since 2007 core tier 1 capital has been increased from 7.1 to 11.8 per cent of risk-weighted assets, and financial leverage has been considerably reduced.
The ECB’s comprehensive assessment of bank balance sheets confirms the resilience of the system as a whole in the face of the exceptionally severe recession afflicting the Italian economy. Nevertheless, changing over to the new rules will require banks to intensify their efforts. In particular, three issues need to be addressed by consistent policies on the part of banks and authorities alike.