of 2010. in parallel, the bank of albania supplied the financial market with the required liquidity to support financial intermediation. aiming at adopting the most advanced models of central banking, and particularly, convergence with euro - system practices, the bank of albania changed the form of its operational objective. since june 2010, our liquidity management operations are oriented to targeting short - term interbank interest rates and minimizing their volatility. * * * the banking system supervision function is another important aspect of central bank duties. 3. banking supervision and financial stability year 2010 was characterised by increases banking system activity, improved banking soundness and profitability indicators, as well as a good capitalisation of the system. on the other hand, the banking system was characterised by increase in non - performing loan portfolio, reflecting also the active policy of the bank of albania in terms of enhancing the transparency of bank balance sheets. banking system development the banking sector continues to remain the main actor of financial intermediation in albania. at end - 2010, banking system assets doubled compared to a year earlier, accounting for about 81 % of gdp. the banking system continued to be financed mainly by public deposits and focused on lending to the private sector. on the other hand, the economy ’ s below - potential growth and the depreciated exchange rate contributed to increasing non - performing loans, to 14 % of total loans. however, this indicator ’ s growth rates decelerated in 2010. capital adequacy ratio remained at satisfactory levels, to 15. 4 %, obviously higher than the 12 % benchmark set forth under the regulatory framework. the system ’ s shareholder equity increased by 10 % in 2010. credit risk remains the main risk to the banking sector. in response to this risk, the banking sector has created adequate provisions to weather big shocks to borrowers ’ solvency and market equilibria. banking system supervision in early 2010, the bank of albania changed its banking supervision organisational framework, orienting and relating it directly to risks associated with the financial activity. in parallel, the bank of albania re - conceptualised its supervision focus and strategy in accordance with risks posed to albania ’ s banking and financial system. transparency and publication of information on banking and financial products and services were in focus of supervision in 2010. encouraging enhancement of private financial agents ’ transparency is also reflected in amendments made to regulatory framework during the year. bis central bankers ’ speeches high commission fees on banking products and services were a

ardian fullani : china - europe economy – future challenges and opportunities address by mr ardian fullani, governor of the bank of albania, at the china - europe economists symposium on “ china - europe economy – future challenges and opportunities ”, tirana, 17 january 2013. * * * dear mr. chairman, dear colleagues, ladies and gentlemen, it is a great pleasure for me to participate in this symposium. the rapidly evolving economic landscape of the past few years poses to policy - makers a demanding set of challenges and opportunities. i am sure that the honest and productive exchange of ideas will facilitate a deeper understanding of the problems we are facing and will allow us to design more appropriate strategies for overcoming them. introduction our topics of discussion today focus on the performance and prospects of china and europe, the two economic regions which probably are at the opposite ends of the spectrum of contagion from the global crisis. while china has remained largely unaffected, europe has suffered significantly. the crisis exposed fundamental structural and institutional weaknesses in the eurozone and the eu. in my short address, i will concentrate on the current state of europe ’ s economic and financial situation. it would be almost an understatement to define the past, the current and the expected developments in the europe, as difficult and short - term. the so - called “ great depression ” tested the eurozone and the european economy. eu convergence process proved to be incomplete, from economic and institutional point of view. from a longer term perspective, the process of globalization and the adverse demographic trends have challenged the sustainability of the economic and social systems of the eu. in spite of these problems, i remain firmly convinced that europe will continue to be a dynamic and prosperous region in the future. the short term costs of structural reforms will be far outweighed by their targeted long - term gains. a more competitive and integrated europe, underpinned by stronger institutions and governed by more sustainable economic and financial policies, will benefit the whole global economy. the remaining part of my speech will address these points in more detail. europe through the crisis europe has been one of the worst hit regions from the global crisis. the initial impact of the subprime market crash in the us was felt across the european financial sector, with stock markets plummeting and banks facing huge losses on their balance sheets. the resulting decrease in asset prices and the drying up of bank credit, the decline in global trade activity as well as the collapse of business and consumer confidence, were