##ised, including in the report on bulgaria that the oecd presented yesterday. it gives clear messages that key indicators for our banking sector, such as capital adequacy and liquidity, are above the average level not only for the european union, but also for the oecd countries. institutional convergence is therefore not an exercise in itself. it brings significant positive results. fiscal consolidation means restoring our more than 20 - year track record of drawing up and exercising a disciplined budget, which was somewhat lost in the last two years. fiscal consolidation is important both in the short term and in the medium and long term. in the short term, it is important because it is the main macroeconomic tool at our country's disposal to contain and reduce inflation, which, as stated, is the only criterion for joining the euro area that we do not meet. even outside the context of the euro area, fiscal consolidation is important, with a view to avoiding the macroeconomic imbalances we witnessed only a few years ago. one channel for the creation of such imbalances is the increasingly open conflict between the fiscal expansion of the past two years and the ongoing global trend of monetary policy tightening. the two policies must work in sync. the medium and long - term aspect of the fiscal consolidation topic is related to the structural reforms to be carried out in the country. a disciplined regular budget with a realistic medium - term macroeconomic and fiscal forecast will provide the framework needed to accelerate structural reforms in relation to investment, the labour market, perhaps the most serious medium - term risk to our economy, education, social security, social assistance, health care, not forgetting of course energy security. to conclude, let me summarise what i want to say. bulgaria is not in a bad position, yet, in terms of joining the euro area. a large and important part of the road has already been covered through the accession of our country to the european banking union and of the bulgarian lev to the european exchange rate mechanism. in order to complete this process successfully, several groups of tasks need to be completed. first, it is necessary to meet the nominal convergence criteria, with a focus on inflation, which is actually the only criterion we are currently not meeting. second, it is necessary to fulfil pre - accession commitments in the 4 / 5 bis - central bankers'speeches areas of the non - banking financial sector, anti - money laundering measures, the management of state - owned enterprises, and the ins

of new legal provisions and amendments to the existing legal framework ( e. g. the law on credit institutions, the law on bank bankruptcy, and the law on the bnb ). strategic decisions need to be made on establishing relevant competent authorities tasked with the responsibility of resolving banks and investment firms, on setting up resolution funds, and on the drawing up by the supervised entities of adequate plans for recovery or controlled restoration of their viability by restructuring. in connection with the new eu capital framework crd4, in 2014 the bnb began to implement the new reporting framework for supervisory purposes ( the so - called finrep and corep ), consisting of over 100 separate reporting forms. the additional supervisory reporting will meet the accumulated information needs of the banking supervision department and will tackle the most sensitive sources of risk in banks ’ portfolios. in 2015 it is expected that the eu - wide banking supervision rules will become more and more common in banking practices. numerous technical standards, developed by the european banking authority ( eba ) and adopted by the european commission, are going to be put in place. in supervising the subsidiaries of euro area banks, the bnb is going to cooperate actively with the single supervisory mechanism ( ssm ) which started in november 2014. last but not least is the bnb ’ s intention to initiate an asset quality review of the entire banking system, which will cover all banks operating in bulgaria. this will also be a key requirement if the government should decide, at some point, to start talks with the ecb for joining the ssm. the methodology of this review will be based on the highest standards already developed and applied by the ecb in the recently completed asset quality review in the euro area largest banks prior to their transition to the ssm. this review will be carried out with the help of an independent external consultant. it should start not later than the end of next year, depending on how the implementation of the new bank recovery and resolution directive advances, including the creation of the respective resolution fund. i assure you that bis central bankers ’ speeches the bnb is going to get commercial banks familiar, at an early enough stage, with the main elements of the methodology of the forthcoming asset quality review, so that each bank could budget the relevant costs ( by analogy with the euro area where banks have borne the costs of their asset quality review ). dear friends, the passing 2014 will regrettably be remembered for the vicious public pressure on the bnb. the central bank