Financial Crisis, Internal Controls and the Role of Supervisors

Corporate scandals and financial crises are ultimately due to the inability to spot, and to fight, the behavioural and informational opacity that affects the normal operation of the processes ensuring market regulation. This paper presents a careful analysis of the characters of the recent crisis, mainly to review four lessons learnt:* stability, transparency and fairness are increasingly interconnected,* supervisors sometimes find it difficult to assume pro-active behaviors,* the regulatory and supervisory best practice is highly uncertain,* internal controls are not adequately effective.The paper, written in Italian by the Market Watchdog Commissioner Vittorio Conti, also claims that the answer to the failures in the control systems, highlighted by the recent market turmoil, are not to be found in an increased regulatory pressure, but rather in the definition of regulatory approaches and enforcement tools that can induce virtuous behaviors