In addition to having an impact on profitability through higher legal costs, this situation has been accompanied by a reputational deterioration which, if not reversed, may lead to a loss of business in the medium term. This is particularly significant in a setting such as the present one with the emergence of new competitors described above. Consequently, it is essential for the sector to recover customers’ trust as soon as possible, this being a key asset in the financial business. Also, Spanish banks have to complete their adaptation to the new international regulatory and supervisory framework. As indicated, although their capital ratios are above the minimum requirements in the area of solvency, the Spanish banking system still remains below other European countries in the case of the highest quality ratio (CET1). Strengthening capital would not only lead to greater resilience to adverse shocks but it would also bring down issuance costs.5 In addition, higher solvency would help facilitate compliance with MREL requirements (Minimum Requirement for own Funds and Eligible Liabilities) that Spanish banks will have to gradually meet over the coming years. It will be a considerable challenge for smaller banks to comply with these requirements since they do not usually obtain funding by regularly tapping the capital markets. Lastly, another significant challenge is that associated with climate change and the transition towards a more sustainable economy which, although it affects all economic agents, has a particular impact on the financial sector.

For this reason, in 2022, work has been done on drafting and implementing the "National Strategy of Financial Education and Inclusion", which aims to improve financial literacy and inclusion of the public at large. Finally, significant improvements have taken place in terms of improving the governance of the institution, through updating risk management systems and ensuring business continuity with the best international practices. In particular, due to the organized cyber-attacks that the country faced last year, the Bank of Albania paid special attention to the enhancement of stability in: the banking sector; in markets; and in the payment systems which the Bank of Albania operates. In more concrete terms, the Bank of Albania reviewed continuity plans for the recovery of the institution's activity in the event of a cyber-attack, intensified the controls and monitoring it performs on the systems and services it provides, and strengthened cooperation with local institutions, such as the National Electronic Certification Agency and Cyber Security (AKCESK) and the Albanian Association of Banks, as well as with international institutions, such as the International Monetary Fund and the World Bank. *** Honourable Members of the Committee, Concluding, allow me to re-emphasise that price stability has been and remains the main mission of the Bank of Albania. Preserving the purchasing power of our national currency, guaranteeing the value of Albanian households' savings, supporting financial stability and establishing the most optimum crediting conditions for a long-term period, are the best service we can do for the Albanian economy.