Nevertheless, as we have seen in the crisis, the availability of a large volume of capital does not per se guarantee an institution’s resilience in the face of sufficiently adverse shocks. That justifies the introduction of further restrictions, such as those setting a maximum leverage ratio and minimum liquidity, which are currently subject to an observation period that will culminate in them being definitively parameterised and incorporated into the new regulatory requirements. Finally, the new legislation includes macroprudential tools which seek to complement the requirements aimed at strengthening each institution's solvency with obligations directed at protecting the system as a whole. Two measures stand out among the macroprudential measures envisaged: those seeking to reduce the procyclicality of microprudential regulation by introducing a countercyclical capital buffer, and those aimed at mitigating the systemic effects of the possible insolvency of individual banks. The second set of measures includes an additional capital buffer for systemically important banks, which is complemented by supplementary requirements for those institutions with the capacity to affect the global financial system. Further, the new legislation includes the adoption of additional macroprudential controls (in the form of capital buffers, changes in risk weightings, etc.) for banks on the basis of their exposure to specific sectors where marked imbalances can be identified. Undoubtedly, these regulatory changes will exert a noticeable positive effect on the capacity of banks to withstand periods of stress and that will result in less frequent and milder crises which, furthermore, should entail lower costs for the public.

Credit risk has been lowered and non-performing loans have been reduced, although their level remains high. After peaking in 2015, Albania’s public debt appears to be set on a downward trend. Also, our external position remains stable and current account deficits have been financed by high levels of foreign direct investments. Turning to the latest developments, the Bank of Albania deems that the recent economic 1/2  BIS central bankers' speeches  and financial indicators have been in line with our projections. This performance reconfirms our scenario of expectations for the outlook. The Bank of Albania expects economic activity to improve in the medium-term horizon. This improvement will enable the return of the economy to equilibrium, the further improvement of indicators in the labour market, and the return of inflation to target. The outlook remains positive, but its guaranteeing requires prudent economic policies and further structural reforms. Such policies and reforms should be, in essence, a continuation of the philosophy that has guided the initiatives and steps we have undertaken in the recent years. To sum up, the Bank of Albania judges that: The actual economic policy combination, based on an accommodative monetary policy and fiscal policy stance set on public debt reduction, should be maintained. The monetary policy should maintain the accommodative stance in the medium-term horizon, whereas the intensity of the monetary stimulus should adapt to the needs of the country’s development. The business climate at home should be further improved.