for domestic banks and monetary policy implementation in our countries. the liquid assets of our domestic banks are composed at large portion of domestic cb - bills and t - bills and accordingly, they are without investment rating ( s & p bb with stable outlook ; fitch bb + with sable outlook ). this could cause serious disruption of design and effectiveness of monetary policy. possibly, it could ask for transition from market based instruments to direct measures - such as reserve requirement. another challenge is to straighten the coordination with the home - host supervisory authorities. it is extremely important and central to the country ’ s financial stability. nbrm is adequately included in the operation of some of the supervisory colleges, but not for all bis central bankers ’ speeches macedonian subsidiaries of foreign banks. as a result, nbrm is not always adequately informed, which could harm its ability to effectively determine the necessary capital level of these banks. in addition, there are still some unresolved gaps in regulatory coordination between home and host countries in the eu single supervision mechanism. and last but not least, the future challange will be impact of single resolution mechanism for a european banking union to our banks and the prospective scaling - back of unconventional monetary policy that could affect the borrowing costs. summing up, the ongoing international regulatory reform, though primarily intended to promote financial stability, may also have some unintended adverse effects on emerging and developing economies, with see region not being an exemption. given the similarity of the financial systems, the see region as a whole faces similar challenges also sharing the common concerns. this raises considerations for stronger regional cooperation as important tool to effectively address future challenges. the recent bank of albania ’ s initiative for region ’ s joint participation within vienna initiative 2. 0, advocated by the bank of albania as steering committee member, can be considered as a huge step forward in building consistent cooperation framework. in it ’ s very first joint initiative, the region focuses on homehost coordination including the confidentiality, cooperation and exchange of information between supervision authorities in the home and host countries, the need for eu banks to adequately adapt their strategies to local needs in host countries as well as some coordination issues among non eu host countries and ecb / ssm. the nbrm strongly welcomes this joint cooperation initiative hoping for it to highly contribute toward strengthening region ’ s effectiveness in tackling various future problems that concern as all. bis central bankers ’ speeches

regulatory framework, pose challenges in this respect as they might ask for a balance sheet rebalancing towards more liquid assets, which can reduce the availability of infrastructure finance. in addition, the implementation of nsfr increases the costs of infrastructure financing as it asks these types of assets to be covered with longer term and more expensive funding. albeit there are many other angles within the new regulatory reform which have been discussed in light of their consequences to the ee ’ s ( for instance policy measures for dealing with systemically important banks, the impact of some other national and regional reforms 1, the two above elaborated dimensions of the basel iii, seem to depict, or to be a good represent of what the main impact boils down to. rising cost of finance, restrained credit availability and more conservative treatment of some of the forms of financing, crucial for the growth of ee ’ s are the most important consequences being discussed, which should be seriously addressed. as for the quantitative impact studies, they do indicate a growth impact of the new regulatory changes, though with varying intensity. while bis macroeconomic assessment group finds rather modes effect, assessment of the international institute of finance and some assessments of the banking industry point to a non - negligible growth effects. a bbva 2 research, conducted in early 2011 estimates the impact of higher liquidity and capital requirement on the quantity and price of credit, and hence its impact on the gdp per capita. the estimation results point to a larger effect of the regulatory changes on the gdp per capita of the emerging markets, compared to the one in the more advanced countries. the results show that an increase in the capital to assets ratio by 20 % reduces the gdp per capita by 1. 6 % for the whole sample, and by 2. 5 % for the emerging markets, while the increase of the liquid reserves to assets ratio by 20 % adversely impacts the gdp per capita by 0. 4 % and 0. 5 %, respectively. another research, conducted by the international institute of finance ( iif ), a private sector institution, in 2011, finds pronounced net cumulative impact on economic activity of the proposed financial sector reforms ( both, car and lcr ) estimating that the level of gdp will be 3. 2 % lower than it would otherwise be after five years with an output loss of 0. 7 % per annum. on the other hand, the analysis conveyed by the macroeconomic assessment group ( mag ), which was set up by the bcbs and fsb in