Few people spontaneously want an increase in consumer prices, but most do want an increase in their nominal incomes. Furthermore, households, firms, financial institutions and governments enter nominal contracts (negotiate wages, take out mortgages, buy sovereign debt etc) based on expected inflation. If actual inflation is higher or lower than these expectations, then wealth and income are transferred from one group to the other. The best way to be neutral is to announce a target that can efficiently guide expectations. To a non-economist, price stability would imply targeting zero inflation. However, we need to explain why targeting zero inflation is not ideal. Real wage adjustments can be necessary to maintain competitiveness and sustain employment and this real adjustment is easier to achieve with a positive inflation rate. This is still more important in a monetary union in which real adjustments are necessary to maintain internal balance. The effective lower bound (ELB) on nominal interest rates would also be reached more frequently, putting a constraint on the use of monetary policy. But I do acknowledge that using the ELB argument at, say a family lunch on Sunday, is easier said than done. Last but not least, credibility. Here, households and firms have mixed feelings: they believe that actual inflation is much higher than central banks and statistics institutes claim; and they doubt we will deliver the “close to 2%”in the future. Distrust is too often the name of the game. Here, let us again listen and speak.

Considering this phase of economic development, it is essential that the regulatory authorities of financial markets and their institutions establish transparent and non-discriminative conditions for conducting business and moreover, develop necessary instruments to identify and eliminate cases of abuse from the financial institutions in their relationships with the other market participants and the clients. According to this agreement, the Bank of Albania shall, in fulfilling its supervisory role and in co-operation with the Competition Authority, support the latter in identifying the behaviour of banks and non-bank financial institutions, which may distort competition and ultimately, maintain an unfair position in the market, set unreal prices for banking products and services and discriminate certain clients or part of the public. In such cases, the Bank of Albania will require the Competition Authority, to start an investigation procedure, according to the law provisions. On the other hand, the Bank of Albania will continue to ensure that the regulatory framework and the supervisory practices remain transparent and provide to all entities meeting the law requirements equal terms for conducting banking and financial activity. In the context of this co-operation, the Bank of Albania and the Competition Authority shall establish the format of formal information exchange, by observing the requirements of the law in terms of its quality and characteristics. Understandably, we have taken only one step along a very long process, which requires its consistency in practice, as well. It is crucial that the importance of this agreement be fully comprehended by the staff of both institutions.