Supervision: what it is and how it works

The Bank of Italy supervises banks and non-banking intermediaries entered in specific registers. Since November 2014 this supervision has been conducted within the framework of the Single Supervisory Mechanism.

Supervisory activities are carried out by the Directorate General for Financial Supervision and Regulation at the Bank of Italy's Head Office in Rome and by its branch network.

In addition to on- and off-site inspections to verify compliance with the requirements for engaging in banking and financial activities, the Bank of Italy's supervisory action extends toactivities include the adoption of administrative measures. The most important measures involving banks are authorizations, sanctions, and those relating to the management of problematic situations.

As national supervisor, the Bank of Italy also provides a number of services directly to the public. It receives requests for information and analyses reports on irregularities involving supervised intermediaries, and publishes information on individuals or companies not authorized to carry out banking or financial activities in Italy and other more general notices and communications. It also conducts analyses on the banking and financial system.

The Bank of Italy performs supervisory tasks also for the purpose of protecting customers of intermediaries.

The Bank of Italy reports on its supervisory procedures and informs the public of the most important banking and financial issues through a variety of forums and channels, including the Annual Report and the Report on Operations and Activities of the Bank of Italy.

The Bank of Italy's supervisory powers have their legal basis in a regulatory framework that encompasses international, European Union and national laws.

Highlights

• 27 February 2024 - Memorandum of understanding between the Bank of Italy and Consob to strengthen their collaboration on supervised entities. The Bank of Italy and the Italian Companies and Stock Exchange Commission (Consob) signed a memorandum of understanding to facilitate the performance of their respective functions regarding supervised entities.
• 22 February 2024 - Multilateral Memorandum of Cooperation (MMC) sponsored by the European Central Bank to foster cooperation on non-EU banks. The Bank of Italy has signed the Multilateral Memorandum of Cooperation (MMC) between the European Central Bank and the National Competent Authorities of the Member States participating in the Single Supervisory Mechanism. Specifically, it aims to make the new supervisory cooperation requirements operative, envisaged under the Capital Requirements Directive, among the competent authorities supervising credit institutions branches with a head office in a third country and the competent authorities of institutions that are part of the same third-country group.
• 21 December 2023 - Notes on Financial Stability and Supervision No. 35 - Bad loan recovery rates in 2022
• 12 December 2023 - Notes on Financial Stability and Supervision No. 34 - Risk-weighted assets dynamics for Italian and SSM banks over the last three years
• 24 November 2023 - Financial Stability Report No. 2 - 2023 - The global economy is slowing down and the strong geopolitical tensions and the deceleration in economic activity in China are weighing on the growth outlook. Inflation is declining in the advanced economies, but it remains above the targets of monetary policy, which continues to be tight.
• 24 November 2023 - Notes on Financial Stability and Supervision No. 33 - Other systemically important institutions: cluster analyses for Italy
• 7-8 September 2023 - Roundtables with Italian banks and other financial intermediaries - Supervisory expectations for climate-related and environmental risks - On 7 and 8 September 2023, two roundtables took place at the Bank of Italy, respectively with banks and other supervised financial intermediaries, focusing on climate and environmental risks. The current and pervasive nature of these risks calls for a high level of attention and an open dialogue between supervisory authorities and supervised entities in order to foster the exchange of experiences and the establishment of good practices.
• 16 August 2023 - CONSOB, Bank of Italy and the Swiss Financial Market Supervisory Authority (FINMA) signed a Memorandum of Understanding - The Commissione Nazionale per le Società e la Borsa (CONSOB), the Bank of Italy and the Swiss Financial Market Supervisory Authority (FINMA) signed a Memorandum of Understanding to facilitate the performance of their respective functions on supervised entities.
• 28 July 2023 - Results of the 2023 EU-wide stress test - Today the European Banking Authority (EBA) has published the results of the stress test conducted jointly by the EBA and the European Central Bank (ECB) covering the largest European banking groups.

Relevant issues