Chiara Scotti: Financial stability and regulation in an age of transformation - how economic research can help reorient navigation
Welcome address by Ms Chiara Scotti, Deputy Governor of the Bank of Italy, at the 5th Bank of Italy, Bocconi University, Einaudi Institute for Economics and Finance (EIEF) and Centre for Economic Policy Research (CEPR) conference "Financial stability and regulation", Rome, 23 March 2026.
Ladies and gentlemen, dear colleagues
I am pleased to welcome you all to the 5th Banca d'Italia, Bocconi University, EIEF and CEPR Conference on 'Financial Stability and Regulation'.
I would like to begin not with statements, but with questions. Why did deposit dynamics differ across banks during the 2023 turmoil? When do unrealized losses on securities become relevant for monetary policy transmission? What is driving the rise of non-bank intermediation, and how is this reshaping risk and liquidity in the financial system? How should supervision and regulation adapt to the digital transition while continuing to safeguard financial stability?
Questions like these are at the heart of our daily work in a central bank. To answer them, we must understand how the structure of financial intermediation is evolving at a time of rapid transformation and whether this makes our models obsolete.
Models built for a world of branch banking and slow-moving deposits, with clear boundaries between financial intermediaries' balance sheets, can no longer capture today's financial system. Supervision and regulation now operate within a far more dynamic and complex ecosystem than a decade ago: digitalization enables depositors to move funds instantly 24/7, both across banks and from banks to a wide range of financial intermediaries. As highlighted by the recent tightening cycle, monetary policy and financial stability interact through complex channels, including the effects of interest rates on the valuation of securities portfolios. Non-bank intermediaries play a much larger role in the global distribution of risks.
This is precisely why economic research matters. It helps us distinguish structural shifts from cyclical noise, uncover less visible transmission channels, measure possible trade-offs between financial stability and growth, and design policies that are robust to uncertainty. Institutions such as Banca d'Italia have a responsibility not only to regulate and supervise, but also to foster rigorous research that supports sound and forward-looking policy choices.