The global challenge of climate change; the shift in demographics as society ages; the growth of emerging market economies and opening up of their capital accounts - will all continue to drive  1  Post-trade generally refers to the processes applied to a trade subsequent to its execution. See World Bank and International Telecommunication Union, Individuals using the internet (% of population), World Telecommunication/ICT Development Report and Database. Available at: https://data.worldbank.org/indicator/IT.NET.USER.ZS 3 See World Bank and International Telecommunication Union, Mobile cellular subscriptions (per 100 people_, World Telecommunication/ICT Development Report and Database. Available at: https://data.worldbank.org/indicator/IT.CEL.SETS.P2 2  2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  changes in the global financial system. Large, interconnected and complex markets adapting to these changes require robust infrastructure underpinning them. So, finance is changing, and technology is both driving and enabling that change. The rise of fintech is one obvious manifestation, with the transformational role it is beginning to play in finance. The Bank recognises this, having a strategic goal of embracing fintech. The Governor spoke at last week’s Innovate Finance conference4, previewing the approach the Bank is taking to its work on the future of the UK financial system5 in response to key economic trends, and how we can provide a platform for a more resilient, effective and efficient financial system. I spoke too, highlighting the role of our Fintech Hub6 in delivering our goal. The pressure of technological change is pertinent to the post-trade system where, industry-wide our capabilities are likely lagging our potential.

Nevertheless, the Report notes that productivity growth slowed down; hence, the firm dynamics is identified as one of the main issues that should concern our region. The main reasons of these developments seem to derive from some factors: First, the low capacity of markets and firms to regenerate, decelerates the replacement of non-productive firms with new innovative ones, and hinders the efficient allocation of resources. Second, small firms do not succeed in increasing their output or the number of employees. Studies show that their productivity is rather lower compared with larger firms. Smaller firms make up the majority of producing entities – around 80% in EBRD region, and 95% in Albania. For this reason, more should be done for the integration of smaller firms into global production networks, finding human capital, access in the financial system or capital markets. The Bank of Albania deems that the development of the financial system is indispensable for the economic development of the country. In this regard, through our policies, we are trying to encourage a more efficient allocation of bank lending, in order for it to be less fragmented or concentrated in certain sectors of the economy. Also, we are closely monitoring the financial and borrowing situation of micro-economic firms, including those in the agricultural sector. These firms have a considerable share in the gross value added and in the number of employed persons in Albania.