Chiara Scotti: Financial stability and regulation

Welcome address by Ms Chiara Scotti, Deputy Governor of the Bank of Italy, at the 4th Bank of Italy, Bocconi University and CEPR Conference on "Financial Stability and Regulation", Rome, 4 April 2024. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
10 April 2024
by Chiara Scotti
PDF full text
(150kb)
  |  5 pages

Opening

It is wonderful to be here today to welcome you to the fourth biennial Financial Stability and Regulation conference organized by the Bank of Italy, the Baffi Centre at Bocconi University, and the CEPR. I wish to thank all the participants – keynote speakers, session chairs, paper presenters and discussants – for their contribution, as well as the scientific and organizing committees for their efforts in putting together this programme and arranging this event.

Research insights are a necessary input to help policymakers address the challenges they face in their work. This is even more so the case when it comes to financial stability and macroprudential policy, an area that needs to be flexible as it grows in response to a fast-evolving financial environment. In my brief remarks today, I would like to share with you some thoughts on the important issues that the conference will address in more detail and depth, specifically on liquidity risk, digitalization, climate risk, and safe assets.

Liquidity risk and the 2023 banking distress

One year ago, with the global tightening of monetary policy going on in the background, we witnessed the most notable system-wide banking distress episode since the Global Financial Crisis (GFC). In a matter of weeks, four mid-size US banks failed amidst a loss of confidence by their depositors, and Swiss authorities had to assist with extraordinary measures the acquisition of an ailing globally systemic institution by its main competitor. Despite these tensions, the global banking system showed remarkable resilience, largely thanks to the comprehensive regulatory and supervisory reforms implemented following the GFC. These reforms likely prevented significant economic damage.