. first, the feasibility of irb application is complicated by the lack of reliable data on at least a full business cycle. second, it requires training and preparation of banking supervisors with new rules, and thereby to improve their ability to examine and evaluate irb approaches for consistency, integrity and accuracy in order to properly measure risk, otherwise, the whole capital allocation system could become faulty. on the other hand, this new environment calls for better cooperation and coordination across countries ’ banking supervision in order to avoid over regulating banks and to save resources. the second challenge relates to the need of developing our own domestic rating industry for assessing borrowers. this is indispensable to gain the potential cost reduction of intermediation out of the implementation of the new system. it will make possible for some borrowers to obtain better ratings and consequently better risk weights compared to the actual 100 % unrated system. however, this is not an easy task by any mean. rating agencies should satisfy several criteria in order to be eligible. these criteria, as you might already be aware of comprise experience, freedom from external influence, publicly available assessments, requirements to disclose assessment models and approaches, sufficient resources and finally validation or recognition by supervisory authorities in our countries. third but certainly not the least, the new system poses a challenge to all banks to improve their capacities in order to comply with the new framework to successfully compete and survive. banks should start adopting a more dynamic and forward looking approach to the evaluation of risk and provisions since under a risk sensitive approach there is always the risk of pro - cyclicality1, which means bank capital ratios are likely to fluctuate more over the course of business cycles. in spite of the above challenges, in albania we have already started addressing some of these issues. first, by making sure that we have consolidated the achievements of our supervisory function by completing the requirements of basel i. we are glad that the good progress has been confirmed also by the fsap assessment during their mission in february - march, this year. certain recommendations related with requirements about consolidated supervision, will be followed very attentively ; second, we have been pushing already our supervisory process and the banks, toward a more risk oriented attitude. at the same time we intend to keep a higher minimum level of capital adequacy ratio than the european standards, in order to provide for some cushion for other forms of risk like operational risk ; third, we try to gain as much as possible out of the experience and knowledge of

us, and workers, consumers and businesses have all emerged in much better shape than we feared in 2020. after the deepest and sharpest recession in our history, we had the fastest recovery on record. the job market came roaring back, and even though economic growth has slowed in recent quarters, the unemployment rate is still relatively low at 5. 7 %. this is where it was just before the pandemic began, when times felt good. the workforce participation rate is high - 1 / 5 bis - central bankers'speeches particularly for women and newcomers - and many of us have taken advantage of new ways of working and new workplace flexibility. many households have added to their savings despite the rising cost of living. but canadians are not feeling happy. i hear this first - hand. we hear this in our canadian survey of consumer expectations. and we see it in other consumer confidence measures and surveys of public sentiment ( chart 1 ). usually, consumer confidence is high when unemployment is low, and vice versa. but right now, sentiment is at a recessionary low - as low as it was during the global financial crisis in 2008a€ “ 09. this is despite the fact that the job market is stronger today and the unemployment rate is lower than it has been for most of the last 40 years. why is public sentiment so low? there's probably more than one reason. people are weary from the pandemic. public attitudes are more polarized, reducing the sense of common purpose. technology is accelerating change, making it harder to keep up. and rising conflicts and climate change are increasing anxiety about the future. these causes are all well beyond the reach of monetary policy. but one factor is clearly our responsibility - inflation. people are angry about high inflation ( chart 2 ). the rising cost of living is making life harder for everyone, especially canadians who have less to start with. people are working hard, but their salaries don't buy what they used to. they can't afford the things they need to live. it feels unfair. that feeling of unfairness eats away at the fabric of society. there's more disagreement. one metric where we can see this is the amount of time lost to labour strikes and work stoppages ( chart 3 ). with higher inflation in the last couple of years, we're seeing more strikes as employers and workers struggle to reconcile rising costs on each side. nobody wants this - workers don't want to strike, and employers don