The Bank of Albania judges that the ability of the banking sector to withstand risks is high. The activity of the banking sector in 2018 was stable with good performance and resilience indicators. The financial result was positive: Return on Assets (RoA) stood at 1.3% and the Return on Equity (RoE) reached 13%. Capitalisation and liquidity levels were above the respective regulatory requirements. Credit risk continues to represent the main risk to the activity of the banking sector, but the credit quality has improved from the previous year. At the end of 2018, the non-performing loans ratio was 11.1% from 13.2% a year earlier, whereas the outstanding non-performing loans reduced by 20%. The Bank of Albania remains committed to fulfilling all its obligations in the framework of the 4/8  BIS central bankers' speeches  national plan for the reduction of non-performing loans. In view of this goal, it has: (i) prepared a draft-regulation on the out-of-court addressing of borrowers; (ii) expanded the requirements for using official financial statements in the assessment of credit risk for all categories of borrowers; (iii) initiated measures for improving the Credit Registry, and has started work for harmonising credit reporting in accordance with international standards. With respect to safeguarding financial stability, the Bank of Albania has continued to work for establishing and developing macro-prudential policy instruments and for establishing early warning systems for systemic risks. In this context, I would like to point out to two key developments.

During 2018, the focus of scientific research was on issues related to monetary policy, safeguarding financial stability, and coordinating these two objectives. The results of the research are shared with national and international experts in scientific panels and are published in discussion papers. An important part of Bank of Albania’s development strategy is the establishment of transparent and long-standing relations with the public. The Bank of Albania has fostered its communication with the public to provide its opinion on economic and financial developments, as well as on the Bank’s role in keeping macro-financial balances. Also, it complied with the obligations under the law “On the right to information” duly informing the public, as requested. During the year several national and international conferences and forums were organized, discussing topics that are at the centre of the current debates and of interest for the country’s development. Notably, the annual conference organized in cooperation with the London School of Economics and Political Science this year was dedicated to new approaches in the framework of monetary policy and the challenges to economic integration. This conference brought together distinguished personalities of central banking from advanced economies and regional countries, central bank governors, academics and representatives of international regulatory authorities. Conferences and discussion forums served to foster cooperation with our key partners such as the Albanian financial system, central banks of European countries and international financial institutions. Fostering co-operation was rendered more concrete with several agreements concluded, notably with the European Central Bank and the Single Resolution Board.