We must thus accept that the necessary fiscal expansion in the short term should go hand-in-hand with a public finances restructuring plan in the medium term. I shall set out the reasons which, in my view, warrant the urgent launch of an ambitious, comprehensive, permanent and assessable strategy of structural reforms and fiscal consolidation. The strategy must be ambitious. The scale of the challenges the Spanish economy faces demands such ambition, if we truly aspire to lay the foundations for sustainable and balanced growth. We should infuse the design and implementation of the reforms with greater impetus, as their credible formulation may positively affect spending, investment and hiring decisions, even in the very short term. Fiscal consolidation should be applied once the economy moves back onto a sound growth path, but its definition and early communication would significantly benefit the credibility of our economic policy. The strategy should be comprehensive, taking into account the multiple interactions among the challenges we must face; such challenges, in many cases, call for international and, in particular, European action. Our ambition must be such as to decisively influence these actions. The strategy should be pursued with a view to it lasting. It is therefore vital that there should be a high degree of consensus. In my previously mentioned address to the Parliamentary Economic Committee, I referred to the need for a political agreement spanning several legislatures. I stand by that need today. Ultimately, any strategy conceived with a medium-term horizon has to be carefully assessed.

The notable decline in nonperforming loans in the balance sheet of the banking system is the most prominent achievement 1/4  BIS central bankers' speeches  in this aspect. The measures taken in mid-2016 have produced a substantial effect, materialised in the reduction of non-performing loans by around 10 percentage points, below the maximum level registered in 2015. It is always a pleasure to note that credit growth has been positive. In particular, the lek credit has grown rapidly, compared to the foreign currency credit, which makes the banking system and the private sector healthier, and enhances the effectiveness of Bank of Albania’s monetary policy. Positive developments in the banking sector and the economy have supported the further improvement of capitalisation, liquidity and profitability indicators. Two months from the end of the year, in our assessment, the banking industry in Albania enjoys full financial soundness, against the backdrop of an optimal liquidity and capitalisation situation, a key prerequisite for financially supporting the economic developments of the country. We have also paid particular attention to legal, institutional, regulatory and supervisory developments, notably the drafting and implementation of the resolution law. Dear participants, This year marked 25 years from the establishment of a two-tier system in Albania, which stipulates the banking system as the provider of financial and banking services in the economy, and the central bank as the administrator of the monetary policy and regulator and supervisor of the banking system.