3  All speeches are available online at www.bankofengland.co.uk/speeches  3  During the 18th century, regional banks acted as venture capitalists, providing equity to power the first 3  industrial revolution. In the mid-19th century, the City underwrote vast issuance of railway securities, spurring the creation of stock exchanges and the development of modern capital markets. 4  During the first wave of globalisation in the 19th century, the development of correspondent banking and 5  trade credit services drove an explosion in global trade, hedged by a step change in activity in the Lloyd’s 6  market. During the second wave of globalisation in the 20th century, London quickly embraced new information technologies, becoming the first major centre to adopt electronic trading. The UK’s openness to foreign currency banking, beginning with the creation of the Eurodollar market, spurred a renaissance of global capital flows. This financed enormous efficiencies through new global supply chains and unprecedented prosperity by opening up emerging markets. 7  Throughout the centuries, it’s been clear that private innovation works best when it is grounded in the right public infrastructure. That includes hard infrastructure – from liquidity facilities to payments architecture – and soft infrastructure – from the rule of law to up-to-date codes of conduct and effective regulatory frameworks. This infrastructure must be overhauled now that the economy is on the cusp of the fourth industrial revolution and our demographic challenges are intensifying. And rebalancing of the global order is proving as dramatic as it was in Montagu Norman’s time.

Rapid changes in the banking system in light of credit boom, and global market financial integration impose the need for higher standards of transparency, accountability and governance from the banking system itself. Not only with regard to Bank of Albania, but public as well. Banks should behave responsibly and must integrate the stability of the entire system into their utility function. Financial system reforms Since years the banking systems has been in a constant process of transformation. The Financial Sector Assessment Program (FSAP) marks a significant moment in this process. On behalf of the Bank of Albania I would like to thank IMF and WB, for their excellent efforts on this professional and transparent financial certification of the Albanian Financial System. Bank of Albania remains very much focused in fulfilling the recommendations of the FSAP following the priority and institutional hierarchy. •  Bank of Albania has increased the access and investment opportunities of commercial banks in the securities market. •  The draft on Banks Law is completed. •  Automated clearing house system is operational. •  The number of electronic transfers has increased significantly. There is concrete evidence that shows a continuous reduction of cash economy. •  Bank of Albania has extended its supervisory authority over all non-bank financial institutions that operate within the economic territory of the Republic of Albania. •  Supervisory Board of the Bank of Albania has further increased the transparency of its decision making process.