of our banks and enhance the resilience of our banking sector, the bank of mauritius encourages international banking groups to conduct business in mauritius through subsidiaries rather than branches. emphasis is equally being laid on the oversight of domestic systemically important financial institutions ( sifis ) for greater financial stability and compliance with the recommendation of basel iii. in terms of regulatory tools, the bank of mauritius has issued some thirty guidelines to institutions under its purview, which cover crucial and diverse areas such as capital adequacy, risk management, credit impairment, corporate governance, public disclosure of information and anti - money laundering, among others. these guidelines are constantly being updated to take on board evolving risks. new guidelines are also in the pipeline, including basel iii. in the field of anti - money laundering, in particular, the bank of mauritius has, besides issuing guidance notes on anti - money laundering and combating the financing of terrorism for financial institutions, set up a committee comprising compliance officers of banks and officials of the bank of mauritius to discuss and follow up on all compliance issues. we have equally signed an mou with the financial intelligence unit, since 2009, for the exchange of information and greater cooperation in combating money laundering and the financing of terrorism. the concern for a macro - prudential oversight of the banking sector stands as a priority on the agenda of the bank of mauritius. in this connection, we have, at national level, entered into mous with the mauritius revenue authority ( mra ), financial services commission ( fsc ), competition commission of mauritius ( ccm ) and statistics mauritius. on the international level, the bank of mauritius has equally signed mous with some ten foreign regulators, of which five are from the region, for a better oversight on the activities of foreign banking institutions operating on our shores and on the regional operations of our bis central bankers ’ speeches local banks. we are also in the process of finalizing mous with a few other central banks in the region. efforts are being deployed in view of the establishment of policies and measures to address the question of banking crisis resolution in the region. it may be highlighted that one of the greatest lessons learnt from the global financial crisis is that, in a world of interconnectedness, regulators must collaborate and exchange information to mitigate the effect of contagion risk and ensure that prompt actions are taken to prevent any future crises. we are gearing our efforts towards the establishment of supervisory colleges in the african region to foster supervisory

stimulus. in advanced economies, the positive global demand momentum has led to increased aggregate demand, while the upward inflationary pressures have made the central banks respond by tightening the monetary policy. in financial markets, the public balance health has determined the yield performance in several countries, while the political tensions have elevated the demand for safer instruments. the outlook remains highly uncertain, as a consequence of higher global prices, fiscal consolidation in some euro - area countries and less space for fiscal and monetary stimulus. returning to albanian economy, the latest data on 2011 q1, obtained from business confidence surveys, the performance of external trade activity, and monetary and fiscal indicators, support the continued recovery of the domestic economic activity, primarily due to positive contribution of production sector. external demand and fiscal stimulus are factors of major influence on this growth. the data analyzed by the supervisory council show that q1 ’ s budget spending rose by 16. 8 %, sustained in part by all 12. 5 billion budget deficit increase, compared to the same period a year earlier. april ’ s data show a decelerated growth of budget revenues over this period, underlining the necessity of taking measures to observe the budget deficit projection. real economy data suggest a slow consumption growth, due to uncertainties about employment outlook. on the other hand, better performance of business credit and increase in capital goods imports suggest that investments have been positive, reinforcing the grounds for a sustainable economic growth in the future. continued business investments in turn require the response of consumer demand, about which the bank of albania judges that there is room for recovery. on the other hand, long - term investment growth will be conditioned by the ability of the albanian economy to attract foreign capital. in this context, responsible institutions at macro and microeconomic level should further strengthen the work for structural reforms, which develop the comparative advantages of the albanian economy and enhance our economic competitiveness in goods, labour and capital markets. the bank of albania judges that preserving the macroeconomic stability parameters is an indispensable condition to orient its work towards maintaining price stability and supporting financial stability at home. 2011 q1 ’ s data on trade activity performance at home show a slight trade deficit narrowing, due to increased imports and decelerated export growth over march. merchandise trade deficit shrank by roughly 0. 3 % y - o - y, accounting for 22. 1 % of gdp. import coverage by exports ratio averaged 44. 5 %, or up 9 percentage points from the same quarter of the previous