10 Monetary policy can only act in a crisis if its credibility is intact. Some central banks, including the SNB, have reached the zero lower bound for interest rates as a result of the recent crisis. Even after hitting the lower bound, these central banks are still able to pursue their objectives. In order to retain their freedom of action, they are resorting to unconventional measures. Some of these measures, such as purchasing securities of private sector issuers, are described as quasi-fiscal, meaning that they are part of monetary policy but, like fiscal policy, they have distribution effects. For this reason, they attract public and political attention and can therefore threaten the central bank’s independence. There is also a danger that politicians, economic agents and the public will expect monetary policy to have a solution for every problem. Numerous problems in the real economy, such as the lack of competitiveness and the current account imbalances, are structural in origin. In this area, it is the responsibility of governments to introduce reforms. Resolving such problems is outside the scope of monetary policy. The management of the recent financial and economic crisis has resulted in a much greater overlap between fiscal and monetary policy activities than before the crisis. In some countries, this has given rise to tension between fiscal and economic policy. The lack of a sustainable fiscal policy can lead to excessive demands being placed on monetary policy, which could result in the latter also straying from the path of stability.

Nonetheless, also thanks to your work, I find that the awareness of decision-making public authorities in this regard has improved significantly. I had the opportunity to communicate about these issues today to the parliamentary, Commission of Economy and Finance. I am confident that the work started by the Ministry of Justice for the revision and improvement of some important legal acts, including the Code of Civil Procedures, will be finalized, incorporating and approving some concrete proposals for amendments submitted by the banking industry and the Bank of Albania in order to enhance the process of collateral execution. In addition, upon the conclusion of legal processes, it is pivotal to proceed swiftly to write-off loss loans from the bank’s balance sheets, in accordance with the requirements of the regulatory framework. We would kindly ask you and your shareholders for dedication in this process, not only to find the necessary human and financial resources, but also the most appropriate forms for a quick, transparent, and consistent handling of non-performing loans. We need to bear in mind that lending carries along risks that are difficult to identify at the time of disbursement. These risks are determined not only by the quality of bank lending procedures, but also by significant external factors, including the performance of the economy. This uncertainty permeates the current phase our banking sector is going through. Therefore, it is indispensable that bank management structures and their shareholders commit the necessary financial resources to cope with the possible additional costs in the future.