and reflecting the time lag of the transmission mechanism, our monetary policy easing has been reflected across all the segments of the financial market. this policy has managed to cut down financing costs of the banking system and of the public and private sectors, and has contributed to establishing adequate conditions for the expected growth of demand and economic activity. until now, however, it bis central bankers ’ speeches has not been reflected in the real economy up to the desired levels. as previously stated, it relates largely to high risk premiums, which arise from uncertainties for the future. the albanian consumers and businesses appear reluctant to increase consumption and investment, despite the lower interest rates in the banking system. credit supply has been relatively tight, due to the perceived risk by banks and risk aversion policies adopted by european banking groups operating in albania. the second quarter has provided signals for an increase in credit demand, although credit expansion remains in negative territory. in may, credit outstanding for the private sector was 1. 8 % lower than in the previous year. the bank lending survey for the second quarter of 2014 suggests for easing lending standards applied to both businesses and households, and their upward demand for credit. new credit has been dominated, for months, by credit extended in the albanian currency. this is a welcomed development as regards the enhancement of monetary policy effectiveness. the albanian reality and world experience suggest that credit recovery will continue to be conditioned by the steady improvement of the economic activity at home, reduction of risk premiums in certain sectors of the economy, and more positive developments in the labour market. looking ahead, economic growth and inflation will continue to experience low rates. in this context, our country does not differ from the rest of the countries in the region and other european countries in general. baseline projections of the bank of albania show that the albanian economy will grow at higher rates than in the previous year, sustained mainly by the expansion of domestic demand. easing of monetary conditions, adjustment of private and public balances, and improvement of economic agents ’ confidence are expected to feed in the domestic demand. the fiscal policy is expected to be consolidating, in line with the medium - term budget plan and commitments with the international monetary fund. structural reforms initiated in certain sectors of the economy are expected to regulate and stimulate their activity, as well as contribute to easing lending standards applied to them. the financial system remains well capitalised and liquid, while the expected revision, on the easing side, of lending standards will lead to a more

4 june 2021 remarks for the panel discussion at the bis - bdf - imf - ngfs green swan 2021 global virtual conference many thanks, morgan, and thank you also to the bis, banque de france, imf and ngfs for the invitation to take part in this panel. as you perfectly know in both my capacity as governor of the bank of spain and member of the governing council of the ecb, and as chair of the basel committee i can say that the topic of climate - related financial risks is one of the top priorities over the coming years. in both cases, i think the right way to frame the issue is to take our mandates as the starting point. in the case of the basel committee, as the primary global standard setter for banks, our mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. if we combine this mandate with the fact that, as has been discussed in various sessions during this conference, climate change poses risks to the financial sector ( physical and transition risks ) that can be significant in magnitude and therefore can impact financial stability at the global level, one should conclude there is a need for supervisors, regulators and, of course, the basel committee to act. in particular, we need to guarantee that individual banks and the banking system as a whole are adequately prepared to identify, measure and mitigate climate - related financial risks. this is the approach we are following at the basel committee level. put differently, our work is motivated by protecting banks from climate change, and not by changing the climate itself, where other measures outside the toolkit of regulators and supervisors are needed. although, of course, achieving our goal will in turn contribute towards meeting broader objectives related to climate change, such as the cop 21 paris agreement. and the mechanism is well known, as banks adequately manage, mitigate and disclose climate related - financial risks as part of their day - to - day business operations, we should expect a natural evolution in the composition of their balance sheets that, in turn, will reflect our path towards a low - carbon world. 1 / 6 in other words, if we succeed in incorporating these risks into the decisions of the financial sector, this will translate into a change in relative prices of financial instruments. and, in turn, that will help to internalise those consequences originating from both transition and physical risks. and this will be a powerful and much - needed complement to the use of the fiscal and environmental