euro area. we have persistently invited policymakers and economic agents in the country to partake in this vision. as the country ’ s monetary authority mandated to guarantee price stability, we have worked and will continue to do so to ensure a low - inflation environment. this environment boosts the guarantees for savers and investors for their long - term plans and provides for financial system development. the bank of albania implements a modern monetary policy based on the most advanced principles of central banking, and employs instruments and communication approach in line with ecb practices. the commitment of the bank of albania to maintain price stability is the polar star of our work. drafting and implementing the monetary policy independently, exclusively in the function of price stability, is one of the domestic anchors of the albanian economy, which should be preserved and strengthened. in parallel, the bank of albania deems that the albanian economy needs two additional anchors : financial stability and fiscal stability. our regulatory and supervisory function over the banking system, which accounts for 95 % of the financial system in albania, has proven successful in guaranteeing the country ’ s financial stability. this function has been carried out and is discharged in line with the international best practices, in constant cooperation with homologous institutions and other international partners. the possibility to have an integrated vision of economic and financial developments, and to combine but not mix the monetary policy with macroprudential measures, has enhanced the effectiveness of bank of albania ’ s actions, and has contributed to better achieving the two individual objectives : financial stability and price stability. the institutional regulation, which has proven effective and is in line with the latest global trends, should continue to function as a second anchor of domestic economic anchors. finally, the bank of albania deems that albania should immediately establish not only a clear and transparent fiscal rule, but also an effective one to discipline the fiscal policy and maintain the trust of financial markets in public finance soundness. this third anchor would complete the framework of domestic anchors of economic policy. together with the close cooperation with international financial institutions, it would provide a consistent and transparent framework for the country ’ s development. provision of liquidity and solvency of the albanian economy through bilateral and multilateral partnerships is a priority for central bank policies. this vision and partnership should become the axis of cooperation between national institutions. bis central bankers ’ speeches

stated, i would like to clarify that the exploration of the potentials that the different regions have to offer and the identification of their level of use is also essential in terms of the banking system ’ s activity, in particular of the geographic expansion and financial intermediation. another major reason motivating the bank of albania to organize these meetings relates with the establishment of a more effective communication channel between the bank of albania and the public. we believe that the direct contact with various social groups in different geographic regions ( that is to each and every family ), in addition to the traditional means of communication, press conferences, monetary policy or financial stability reports, is a very efficient tool and frequently determinant. i would like to dwell today on some matters of interest to the entire audience. first i would like to make a brief outline of the bank of albania ’ s latest analysis of the economic and financial situation in albania : in brief, three are the main developments of greatest interest to the audience : with regard to the international developments, the economic and financial situation has been very complex in the last months. inflation has turned into a point of concern in most foreign economies, mainly driven by the high prices of raw materials, oil and food. in addition, economic activity in developed economies has experienced sharp turns. euro area economy is at present in front of many questions, while the us and some asian economies have shown slow rates of economic growth. credit crisis has caused many reputable international institutions to experience large financial losses and its contamination process is still present. recently, the two us mortgage giants, freddie mac and fannie mae, which were on the verge of collapse, were subject to an unprecedented and costly rescue plan designed by the us treasury department. all these issues have triggered uncertainties in the markets, causing the future forecasts to be more challenging and the participants ’ exasperation to peak. i would consider the immunity shown by our economy in terms of price stability as the most outstanding development. albania ’ s economic activity is progressing in line with our previous expectations. a few days ago, instat published the inflation figure for august 2008, according to which annual inflation marked 2. 5 %. following a 12 - month period of inflation rates standing at around 4 - 4. 5 %, in line with our forecasts, it is assessed that inflation will fluctuate in the next few months at around 3 %, which is our quantitative objective. worth to note, however, is that the risk for