4  BIS Review 148/2010  Growth and employment While the Italian banking system may have withstood the global financial crisis of 2007–08 better than others, the recession that it provoked was especially severe in our country, driving annual output in 2009 down to the level of nine years earlier.
In turn, if the central bank cannot be held to account for poor performance, it will not face strong incentives to deliver a good performance. Similar principles should inform the role of the central bank as bank regulator.