In this context, the banking industry now has a more adequate legal and regulatory framework on protecting the interests of the creditor, repossessing collateral and executing it, and a more transparent environment for assessing the risk of individual borrowers. On this basis, the Bank of Albania deems that the banking sector, should: Pay additional attention to crediting as a commitment that generates mutual benefits both for it and the Albanian economy; Empower internal structures and its analytical and managerial capacities in terms of crediting; Ensure prioritized implementation of outstanding commitments under the plan of measures for reducing non-performing loans; and, Be more vocal and more transparent in identifying obstacles or deficiencies it finds in the crediting environment, both in legal and in regulatory aspects. These recommendations should not be addressed separately from the second challenge. 2. Efficient allocation of bank loans as a precondition for sustainable and long-term development Increased attention to crediting does not imply merely increased attention to the volume of credit, but also additional attention to its quality. These two aspects are complementary and do not contradict each other in the long run. The history of credit in transition economies, including Albania, features some problematic elements which we need to avoid in the future. First, credit has been notably concentrated in non-tradable goods and services, such as residential buildings and services, which are oriented solely – or primarily – toward the domestic market.

Enriching the array of financial products and payment instruments In addition to its primary function, intermediation of funds, the banking sector has an essential role to play in providing payment services to the economy. The scale and efficiency of accomplishing this role is in proportionate correlation to the scale of financial inclusion of the population, the overall efficiency of the economy, and – why not – the level of its formalisation. In the framework of its role as overseer of payment systems, the Bank of Albania has undertaken a series of measures to further improve legal and regulatory frameworks. These improvements aim to accommodate innovative technological developments in the field of payments, enhance effectiveness by promoting competition and ensure transparency and consumer protection. Acknowledging the role of other institutions, the Bank of Albania, together with the National Payment Systems Committee, have drafted for the first time the National Retail Payments Strategy, which identified market needs and relevant measures for intervention. The goal of the Strategy is to improve the retail payment market by providing Albanian citizens with more choices for their daily transactions, in an easy-to-use cost-effective way, as well as to increase financial inclusion. The Strategy has a detailed action plan; the Bank of Albania is fully committed to its implementation. In this framework, I would like to emphasise a notable achievement, the finalisation of the draft law on “Payment services”, which transposes the Revised EU Directive on Payment Services (PSD2). The draft is currently subject to public consultations.