in incrementing the monetary stimulus. in november, to reduce uncertainty about how this facility would operate, we announced how and when we would withdraw it, but keeping a significant monetary impulse to help the closing of output gap and thus pushing inflation closer to the target. now that the worst of the financial crisis has been behind us for one year, the international economy has stabilized, uncertainty has declined, and the world is resuming moderate growth. in chile, we have seen household and corporate confidence pick up, within a context of highly expansionary macroeconomic conditions. economic activity began to rise in the third quarter ; the labor market stopped deteriorating, and financial conditions have become less stringent. inflation is still negative and even below earlier projections. unlike developed countries, chile is entering this recovery phase with a strong financial system. our banking system has, on average, similar or better solvency levels than it had in the years leading to the external financial crisis. this should allow the financing of investment and consumption during the economic recovery phase. meanwhile, the market for bonds and commercial paper has become ever more important as a source of funding for larger firms. risks remain, however, and the return to sustained growth in chile and the world is not a done deal. in particular, macroeconomic packages need to be continued until the recovery is well established. emerging economies and commodity exporters deal with their own tensions. most recently, these have centered on the appreciation of their currencies, largely dependent on the us dollar. in chile, with a floating exchange rate system, the peso is not spared the effects of the world events. certainly, we will have to continue monitoring the exchange rate very closely. in particular, we will have to figure out its policy implications in order to ensure a persistent closing of the output gap and the return of inflation to the target. we foresee, as stated in the monetary policy report, that the mpr will be kept low for an extended period, to reduce pressures on the strength of the peso and open the way for a sustained recovery of private demand. next, i will describe the latest economic and financial events, projections and risks surrounding our economy, and the way in which inflation will converge to 3 % over a two - year horizon. macroeconomic scenario as i pointed out before, the international economy has stabilized. the change in financial conditions has reduced risk premia, recovered key financial prices and restored investment flows towards emerging economies. risk indicators are back to the levels they

to the development level of the country and calibrated according to domestic conditions. second, international standards pose a minimum of requirements, leaving it at the discretion of individual countries to undertake more stringent requirements. the model of global integration is the economic model that has been adopted by most of the transition countries, such as albania. under this guidance, the albanian banking market has demonstrated clear willingness and objectives for a swift harmonization with the legal framework of the european union ’ s banking system, as well as with its significant changes since 2008. although there are no cases of bank failures in the history of the albanian banking sector, we have identified in our banking legislation the same loopholes found in other european economies. the development of hypothetical scenarios for coping with a potential exposure of the albanian economy to the greek sovereign debt crisis evidenced that the bank of albania – as the supervisory authority of the banking sector – did not have all the necessary legal instruments to manage insolvency situations in systemically - important banks. this need for a new legal framework is addressed in both national and cross - border aspects, by the bank recovery and resolution directive. in fact, the initial efforts to prepare and present the first recovery plan to the bank of albania started in 2012. the relevant regulation was approved by the supervisory council of the bank of albania in 2014. but, of course, these efforts were made within the supervisory legal authority and, as such, they were not sufficient. for this reason, during 2015, with the support of world bank ’ s finsac project, the bank of albania started the difficult but necessary work of harmonizing the european directive into a new albanian law. the law ‘'on the recovery and resolution of banks in the republic of albania'’ entered into force 3 / 5 bis central bankers'speeches in july 2017, vesting the bank of albania with a new attribute, i. e. the resolution authority. this attribute completes the financial security mechanism of the banking sector, with the bank of albania responsible for regulating and supervising the banking sector, drafting macro - prudential policies, performing the function of the lender of last resort as well as the implementation of banks ’ resolution. together with the deposit insurance scheme provided by the deposit insurance agency since 2002, the financial safety net framework in albania is complete. for the purposes of this law, the resolution fund was created with contributions from the banking sector. this fund aims to reach all 6. 3 billion within 2027. the implementation of the albanian