We characterize those commuting pairs of operators on Hubert space that have the symmetrized bidisc as a spectral set in terms of the positivity of a hermitian operator pencil (without any assumption about the joint spectrum of the pair). Further equivalent conditions are that the pair has a normal dilation to the distinguished boundary of the symmetrized bidisc, and that the pair has the symmetrized bidisc as a complete spectral set. A consequence is that every contractive representation of the operator algebra A(Γ) of continuous functions on the symmetrized bidisc analytic in the interior is completely contractive. The proofs depend on a polynomial identity that is derived with the aid of a realization formula for doubly symmetric hereditary polynomials, which are positive on commuting pairs of contractions.

For a connected open subset Ω of the plane and n a positive integer, let be the space introduced by Cowen and Douglas in their paper, “Complex geometry and operator theory”. Our main concern is the case n = 1, in which case we show the existence of a functional calculus for von Neumann operators in for which a spectral mapping theorem holds. In particular we prove that if the spectrum of , is a spectral set for T, and if , then σ(f(T)) = f(Ω)- for every bounded analytic function f on the interior of L, where L is compact, σ(T) ⊂ L, the interior of L is simply connected and L is minimal with respect to these properties. This functional calculus turns out to be nice in the sense that the general study of von Neumann operators in is reduced to the special situation where Ω is an open connected subset of the unit disc with .