The basic skills that economists can bring to such meetings are a framing of developments based on the efficient markets hypothesis, which holds that financial markets will quickly incorporate all relevant information in asset prices, along with an understanding of economic fundamentals. Many commentators have associated a blind faith in efficient markets by market participants and regulators as one of the main underlying causes of the crisis.6 This seems an overly simplistic and mostly incorrect characterization. A partially correct aspect of this critique is that market discipline failed in the period before the crisis. However, this is not a true rejection of the efficient markets hypothesis, as expounded by Gene Fama, but rather a failure for incentives to be appropriately aligned.7 An efficient markets explanation usually involves a great deal of the Monday morning quarterbacking: after observing market moves that prove an analysis incorrect, there is usually a tweak to this previous analysis prompted by the market move, which does not require any substantial changes to an underlying view. To outsiders this might sound like cheating, but if the efficient markets hypothesis has validity, then unexpected market moves always contain new information over the original analysis. Indeed, the ability of individual markets to efficiently aggregate diverse sources of information most of the time is why the efficient markets hypothesis gained empirical support.8  6  See Adam B. Ashcraft and Til Schuermann (2008), “Understanding the Securitization of Subprime Mortgage Credit” Federal Reserve Bank of New York Staff Reports No.

In addition, the structure of financial flows from abroad shows larger funding through FDI inflows, which mitigates the risks to external sustainability. However, debt financing is also mounting, attributed by both public and private sector. Although, according to most indicators of external indebtedness, Macedonia is still in the "safe zone", the growth of external debt is undoubtedly a signal for additional vigilance by policy-makers, which is especially true for developing countries. Bearing in mind that, despite the positive developments, the domestic savings rate in the Macedonian economy remains below the average and among the lower rates in the CESEE countries, an active contribution from all counterparties is necessary. For banks, this means continuous improvement of the offer of savings products, which will be price-competitive, but also adjusted to the needs of the "ordinary" depositor and keeping-up with the challenges of the modern life. In this context, I would also mention the savings that are still out of the official channels and whose attraction and channeling into official financial channels can significantly increase financial intermediation. Let's not forget the potential of the non-banking financial sector, which through a more active promotion and financial education of citizens on alternative forms of saving, can contribute to the mobilization of additional savings from the households. The development of the institutional investors creates a base for the development of the domestic capital market and increasing its importance as a financial intermediary in the economy. The role of the institutions is also important.