is present in all the european economies, including those of the region. this phenomenon reflects mostly the added prudence of large european banking groups against credit risk and poor economic performance. in this regard, the asset quality evaluation process by the european central bank, in june, will serve to give insight into the financial soundness of banking groups and may become a premise for a more positive attitude towards lending. in the domestic context, lending would benefit from the reduction of risk present in the albanian economy. therefore, all policymakers should work harder to improve the business climate, develop a new economic growth model, based on producing and exporting activities, and solve legal issues still present in the area of collateral execution. once the monetary policy easing reinforces, the external setting improves, and optimism in the economy increases, we expect a fuller transmission of the monetary stimuli to the real economy during the current year. however, as proven by world practice, boosting lending cannot and should not be an issue of concern and scope of work only of the central bank. i would like now to elaborate on issues pertaining to banking supervision and financial stability. bis central bankers ’ speeches 3. banking supervision and financial stability the law on the bank of albania sets out a series of rights and obligations, which serve to sustain the country ’ s financial stability. the bank of albania is responsible for licencing, regulating and supervising the activity of the banking sector, which dominates the financial system in albania. by implementing macro - prudential policies, regulating and supervising the banking sector prudentially, playing the role of the “ lender of last resort ”, and regulating and overseeing the payments infrastructure, it aims at sustaining an effective and stable banking system, by providing direct contribution to maintaining the country ’ s financial stability. the legal framework also establishes the responsibility of the bank of albania to communicate its assessment on the financial system ’ s stability. despite challenges produced by economic realities both at home and abroad, the albanian banking system is solid, liquid, and well capitalised. at the end of 2013, its financial profit was positive and stood higher than in 2012. the capital adequacy ratio and liquidity indicators were significantly above the minimum regulatory requirements of supervision. banking sector assets increased, albeit at lower rates from a year earlier, as a result of slower increase in deposits and decrease in crediting. overall, the banking system is considered as stable. it is little exposed to direct market risks, but credit risk has been upward and

european central bank : press conference - introductory statement introductory statement by mr willem f duisenberg, president of the european central bank and mr lucas papademos, vice - president of the european central bank, at the press conference held in frankfurt, 7 november 2002. * * * ladies and gentlemen, the vice - president and i will report on the outcome of today's meeting of the governing council of the ecb. we have reviewed monetary, financial and economic developments and updated our assessment in the light of the information available. in view of the high uncertainty on future growth, and its implication for medium - term inflationary developments, the governing council has discussed extensively the arguments for and against a cut in the key ecb interest rates. the view has prevailed to keep interest rates unchanged. however, the governing council will monitor closely the downside risks to economic growth in the euro area. as regards the analysis under the first pillar of our monetary policy strategy, the three - month average of the annual growth rates of m3 was 7. 1 % in the period from july to september 2002, unchanged from the previous three - month average. the continuing strong expansion of m3 should be interpreted with caution, since it has been boosted considerably by high uncertainty in financial markets over recent months. at the same time, the low level of short - term interest rates continues to stimulate demand for the most liquid assets, which are included in the narrow aggregate m1. loans to the private sector have stabilised at growth rates somewhat above 5 %, a rate of expansion which, in real terms, is broadly in line with the long - term average. considering all the evidence relating to the first pillar, from a medium - term perspective, more liquidity is available than would be needed to finance sustainable, non - inflationary growth. however, given the current economic environment, we do not see the risk of this translating into inflationary pressure in the near future. concerning the second pillar, recent short - term conjunctural indicators and survey data suggest that real gdp in the euro area has continued to grow only moderately in the third quarter of this year. this is in contrast to earlier expectations that a more pronounced upswing would occur in the course of this year. obviously, the hesitant pace of economic expansion and current, lacklustre confidence reflect the significant degree of uncertainty that has been building up over recent months. this uncertainty is associated with geopolitical tensions, the evolution of oil prices and developments in stock markets. however