9  Following the post-crisis adjustment, private sector debt to GDP ratio stands very heterogeneous across CESEE countries ranging from about 28% of GDP to 129% of GDP in 2017. In most CESEE countries, debt levels are below the European average which corresponds to the level of economic and financial development. Private sector debt ratios in most of the countries are below the threshold in the Macroeconomic Imbalance Procedure (133% of GDP for total private debt) and MIP based reference values for households and non-financial corporate debt. Favorable financing conditions and solid economic growth recently have alleviated debt sustainability concerns in the region. Yet, there are important differences across countries. In Albania, Romania and the Czech Republic, debt levels are well below MIP based vulnerability benchmarks with private debt having stabilized or decreasing in recent years. In other countries, such as Slovakia, North Macedonia and to some extent Poland, private debt remains moderate by international standards, but is growing post-crisis urging for close vigilance by authorities. There are also countries such as Bulgaria and Croatia where private sector is still highly leveraged and therefore is source of concern for macro-financial stability. European Commission5 notes high corporate debt in Bulgaria as potential drag on investment and growth over the medium term. Deficiencies in the insolvency framework are identified as important factor that slows down the reduction in private sector debt and the workout of nonperforming loans in the country.

PLATFORM FOR DISCUSSION  EVENT: BIS Meeting of the Working Party on Monetary Policy in Central and Eastern Europe 2њљњљ DATE:  NATIONAL BANK OF THE REPUBLIC OF NORTH MACEDONIA  20-21 February 2020  info@nbrm.mk  LOCATION: Becici, Montenegro  www.nbrm.mk  MONETARY POLICY CONUNDRUM IN DEVELOPED ECONOMIES – IS THE REGION DIFFERENT? Ana Mitreska, NBRNM Ljupka Georgievska FSBRR1, NBRNM Gani Ramadani MPRD2, NBRNM  1 Financial Stability, Banking Regulations and Resolution Department. 2 Monetary Policy and Research Department. 1  Monetary Policy Conundrum in Developed Economies – is the Region Different? Ten years after the global crisis, it is more than certain that the context for monetary policy making has not returned to the pre – crisis “normal”. Central banks, in advanced economies in particular, have deployed unprecedented measures to ensure proper functioning of financial markets, and to provide impetus to the economy. Despite the recent global recovery, uncertainties remain elevated and possible vulnerabilities come to the fore. At the same time, certain macro-economic linkages on which conventional monetary policy making was based on have been challenged. To streamline the matter, we will tackle few important issues, which as monetary policy makers we have been faced with. First, though the monetary accommodation helped the recovery, easy financing conditions might have encouraged excessive risk-taking and building of debt vulnerabilities. Second, inflation rate has been low for long, despite the wage growth in many countries, giving ground to the so called “wage – price puzzle”, and questioning the traditional Phillips curve concept.