A second reason that insurance broking is at a critical crossroad is the accelerated pace of change that is occurring in Asia and the business implications that this will have for the region. Asia is the most dynamic and fastest growing region in the world today. The region recorded economic growth of over 7 percent in the past decade, higher than global growth of 4 percent. The IMF’s latest forecast projects growth for Asia at 6.4 and 6.2 percent in 2015 and 2016 respectively, in sharp contrast with anaemic growth in more advanced economies. Reflecting its growing contribution to global growth, Asia accounted for approximately 28% of the world’s premiums, after Europe (35%) and North America (30%). 1 Coupled with a high population growth rate, there are projections that Asia will overtake North America as the second largest contributor to world insurance premiums in several years. The establishment of the ASEAN Economic Community at the end of 2015 will create a single large market and production base with freer flow of goods, services, investment, skilled labour, and capital; opening up huge opportunities for business growth from a combined GDP of over USD2 trillion and population of 600 million people. Services have also become a more important component of trade across the region. This has obvious strategic implications for the insurance broking sector to capture the significant growth opportunities that will emerge. It is therefore not surprising to find that more companies already have, or are developing, ASEAN-oriented strategies to position themselves for an integrated ASEAN environment.

In this respect, the concept of financial stability was seen as a by product of monetary stability. Economists believed that by stabilizing consumer prices, financial assets would also behave in a stable and predictable way. The crisis painfully reminds us that: this is not necessarily true. Behaviour in financial markets is not always rational and lack of confidence in the markets can spiral out of control, sending shockwaves throughout the economy. Fortunately, the Bank of Albania adopted a more conservative approach considering monetary policy and financial stability issues simultaneously, conditioning either decisionmaking process by the other one. Due to this behaviour, the crisis had a direct but trivial impact on the financial system. Despite this, the banking system faced immediate difficulties in the form of deposit withdrawals, emerging as indirect effects of fear contagion and irrational expectations. The liquidity problems that emerged spilled over to the credit market and later to the real economy and foreign sector. The Bank of Albania reacted quickly to this changing economic climate. Liquidity was abundantly injected to our banks and more stringent regulations were applied in regard to the transfer of funds. However, unlike in most other countries where monetary policy was used initially to boost aggregate demand, in Albania, monetary policy stayed in its course giving way to expansionary fiscal policy. Due to a relatively long period of consolidation, fiscal policy at the outburst of crises had abundant room for manoeuvre and has a more direct impact on the economy.