Albanian economy in the face of the global crisis Like all developing and emerging economies, the Albanian economy has undergone a rapid economic growth on its path to catching up EU economies. This growth has been mostly supported by rapidly increased consumption in economy and has been financed by using previous savings or foreign financing sources. The main beneficiaries of this demand are construction and services, i.e., the sectors that use labour force intensively and ensure increase in wages and employment but which are slightly export-oriented. On the other hand, industry and agriculture slowed down, suffering from lack of attention by the banking system, a higher degree of investments and expertise, and longer time needed for return on investments. This tendency has left Albania with a small base of export-oriented industries or of those competing with import products. The global crisis served as an important testing for this growth model. It highlighted its limits to face external shocks and its restrictions in an ever challenging global environment. In  2  BIS central bankers’ speeches  simpler words, the global crisis revealed the importance of maintaining sound balances in both public and private sectors. It also depicted that more competitive economies that have successfully competed in global markets are those economies that have higher and more sustainable growth rates. It is my pleasure to state that this lesson has been learned by the Albanian economy at both consumer and producer level. More specifically, Albanian households have been more reluctant to spend and more inclined to save.

Eliminating these loans from the banks’ balance sheets, in the absence of a coordinated interpretation, leads to consequences on the banks’ tax burden and prevents writing off loss loans from balance sheets; subsequently, the level of non-performing loans swells and banks allocate their capacities inefficiently. I take the opportunity to underline that the banking industry and fiscal authorities need to identify the factors that lead to different interpretation of the same problem, and to formulate the necessary legal and sublegal amendments to provide a definite solution. The Bank of Albania is willing and stands ready to provide comprehensive assistance on this matter. Role of business The business-banks relationship is fundamental to economic activity success. This relationship is always conditioned by developments in the surrounding environment. The effects of the economy’s slowdown have not been uniform across the sectors of the economy, and businesses do not face the same problems. Nevertheless, overall, businesses face lower volume and income of economic activity. Some businesses need to restructure their activity, not only by decreasing costs and improving efficiency, but also by entering new markets and introducing new products. To achieve this target, the owners’ instinct and willingness do not suffice; it takes professional expertise, well-studied projects and additional financing or restructuring of the existing loan. I think that the business-bank partnership is indispensable in this process. Banks are increasingly developing their financial advisory capacities and are also developing banking products in order to be closer to the needs of the business.