As a result, in Albania we have increased our efforts to restructure the economy. The BoA has also sought to increase transparency in the banking system and to strengthen its balance sheets, both through capital increases and through tackling bad loans. The latter has been done through promoting credit restructuring or credit write-offs. In this regards the focus of bank of Albania will include a micro-approach in analyzing the bad debtors of systemic importance. •  International cooperation is a prerequisite for mitigating contagion effects and for successful crisis management. Particularly, the Vienna Initiative has been instrumental in limiting the deleveraging process of the private banking system in our economies. •  Safety nets have to be improved, in order to make them more efficient and sustainable. Several issues remain to be solved. SEE economies have rightly chosen integration in EU as their main goal. It helps to anchor their political systems, their structural reforms, their legal and regulatory environment and their macroeconomic and financial policies. However, the economic growth model has to change. The main focus of national authorities in SEE should be to facilitate the allocation of capital to more productive sectors, by providing the right incentives structural reforms, legal environment, tax policies, and economic stability. In the financial system of these countries, dominated by banks, the deleveraging process is undergoing under the pressure of the deteriorating loan quality. Credit is made scarce as banks have become risk averse and hesitate to lend to potential borrowers by tightening lending terms.

This often results in structural defects in the financial systems that are not conducive to the maintenance of monetary and financial stability; for example, regulatory gaps, low transparency and market concentration. These defects also breed unethical behaviour. Indeed, free and open emerging markets are considered by some as markets that can be rather freely manipulated. They also call them ATMs. But I still believe that financial openness outweighs the risks of financial instability, and that the risks I mentioned just need to be, and can be, managed, simply by being sensible in the development of the financial system, reminding ourselves always that the primary purpose of the financial system is financial intermediation that supports the economy. Although it provides employment for quite a number of people, including us, and profits for a lot of capital, the financial system does not and should not have a life of its own. Gradualism is perhaps a prudent attitude, even if this means taking a little more time or appearing for a time to be not as welcoming as the top players in international finance would like. "Because others have it" is definitely a risky attitude to take in financial development. And as developed markets are going back to basics, a no-frills approach to financial development may not be a bad idea. Financial openness does not mean getting all the top brand names to set up shop in your backyard and importing innovative financial instruments and practices. Indeed, some of those innovative financial instruments may be toxic.