Regarding institutional issues, the European Commission, International Monetary Fund and World Bank have given the Bank a maximum score. *** Dear Members, Ladies and Gentlemen, Completing my speech, allow me to highlight some problems which have conditioned and will condition the functioning of Albanian economy and financial markets. We deem that these problems require prior attention and cautious solution. First, the integration of the Albanian economy with the European financial systems and markets implies that shocks and swings to our financial and trading partners are soon transmitted to the Albanian economy. The medium and long-term outlook of the Albanian economy is related to that of our trading partners. Global market ups and downs increase or decrease the economic activity in the country. Overall, the integration process remains beneficial to the Albanian economy, but it poses challenges as well. Therefore, I would like to emphasise that the Albanian economy and financial system should pay more attention to global market developments; our structural reforms should aim at increasing resistance to their swings, while our economic policies should be cautiously oriented toward long-term global trends. Secondly, the country’s financial stability should be seen as a duty of all and not as an issue of one or some institutions. The financial stability is a public good that serves the long-term development of a country. Recent global developments have proven that the financial system is a highly integrated mosaic; its stability has many dimensions and it is determined by the interplay of many segments and stakeholders.

One of the biggest investments of the Bank of Albania to guarantee our currency’s integrity is the construction of the new building of Currency Issue Centre, which started operating in 2012. The closed and automated cycle of controlling processing, packaging and shredding of banknotes takes place in this building. Soon professional expertise on banknotes and coins suspected to be counterfeit will be made, hence fulfilling one of the obligations of the Albanian state in view of the Stabilisation and Association Agreement. Foreign-exchange reserve management Holding and managing Albania’s foreign-exchange reserve to preserve financial stability of the economy is another constitutional function of the Bank of Albania. The gross foreign-exchange reserve was up by EUR 65 million in 2012, registering EUR 1.972 million at the end of December 2012. Payment system Fulfilling its legal duty, the Bank of Albania promotes smooth functioning of payment systems to support the monetary policy implementation and maintain financial stability. During 2012, Lek interbank transactions were cleared and settled timely, efficiently and safely, conform to rules and procedures of both systems (ARCH and AIPS). Also, several regulations and manuals were reviewed and drafted, consisting in strengthening the supervision and further developing the Albanian payment system. Improvement of statistics The year 2012 pointed to improved statistics as a legal responsibility of the Bank of Albania. During this year, a model was drafted to improve the balance of payments statistics and the international investment position, aiming to approximate the national statistics system with the ECB and ESCB standards.