The committee, has discussed issues such as: (i) annual work plan and internal audit engagements for the year; (ii) periodic reporting by the Inspector General on the auditing activity; (iii) financial statements; and, (iv) performance of operational risk management at the Bank of Albania. It has met regularly, without the presence of the administrators, with the Inspector General. Lastly, I would like to emphasise that the Council has regularly complied with Bank of Albania’s accountability obligations to the Assembly and its transparency obligations to the public, and the financial system. Albanian economy and monetary policy in 2018 The monetary policy maintained, even strengthened, the accommodative stance in 2018. The policy was in line with our inflation target convergence objective, consistent with the cyclical position of the Albanian economy, and aligned with the consolidation trend of the fiscal policy. 2/8  BIS central bankers' speeches  The Albanian economy performed positively throughout 2018. Aggregate demand increasingly expanded, enabling thus a further increase in production, employment and wages, and contributing to the improvement of the main economic and financial balances of the country’s economy. A few figures to illustrate it. According to INSTAT data, the pace of economic growth accelerated to 4.1% in 2018. Economic growth was broad based; it reflected positive contributions from the expansion of the consumption of households and enterprises, and of exports. According to INSTAT data, employment in the economy rose by 1.6% in the previous year, whereas the unemployment rate fell to 12.3% from 13.4% a year earlier.

2  BIS central bankers’ speeches  In this context, the need for principles of the above-mentioned international organisations to be supported and adhered to by both private and public sectors becomes increasingly clear. This should be done by adopting and implementing codes of conduct at corporate level and industry-wide, as well as by improving the legal, institutional and regulatory framework pertaining to corporate governance. Let me now turn to Europe. In the case of the European Union, the crisis has exposed fundamental weaknesses of the European economy, revealing growing internal imbalances. The functioning of the European Monetary Union has been under particular stress as the existing surveillance procedures proved to be not comprehensive enough. One point that has been neglected was the relevance of current account deficits. I believe that within the EU, the external deficits of Member States are relevant as they reveal discrepancies related to competitiveness, and therefore inconsistent and weak coherence of the economic policies. The accumulation of imbalances has triggered a slow pace of recovery in Europe. The crisis took its toll on productivity, and prices and competitiveness remain key issues. Also, the functioning of the European Monetary Union caused headaches because of insufficient comprehensive preventive and supervisory procedures. Moreover, sovereign debt crisis has brought in the limelight not the crisis of the euro per se but of the institutions that governs the eurozone. In this context, I will repeat what Douglas North said: Institutions play a pivotal role in governance.