indicator analysis. in june, annual growth of m3 aggregate was 11. 8 %, around average rates of the past 12 months. our assessments show that the expansion of monetary supply is in line with the performance of the economy ’ s demand for monetary assets. in june and throughout the second quarter, the public sector demand for funding was high, in line with the intensity of the fiscal activity during that period of the year. furthermore, the private sector demand for funding continued to be moderate. lending to private sector posted annual growth of 11. 6 % in june, in line with the second quarter ’ s performance. financial markets are characterised by a serene environment with contained risk premia. interbank market experienced increased trade volume ; interest rates were close to the key rate and had low volatility. in the primary market, government ’ s demand for funding is reflected in the increased yields of government securities. however, the trajectory of yields retained its trend, showing low inflation expectations by market agents. as regards the economy ’ s performance outlook, our projections and assessments suggest a continuation of economic growth, in terms relative to those of the first quarter. composition of aggregate demand is expected to be different to the one of the first half of the year : private sector of the economy is expected to be more vivacious in the second half, while the contribution of the public and external sectors are expected to be more moderate. size and speed of the private sector recovery shall define the stability of economic growth in the future. in spite of assessments for increased aggregate demand, economic activity in albania is expected to remain below its potential, thus conditioning the continuation of spare bis central bankers ’ speeches capacities in the economy in the period ahead. subsequently, inflationary pressures originating from the aggregate demand are expected to be contained. in addition, foreign prices effect is expected to be more moderate in the upcoming months while inflation expectations of economic agents continue to be within the target band. consumer price inflation is expected to continue its downward trend in the next months, gradually approaching the bank of albania target. taking into consideration the information above, the supervisory council concluded that inflationary pressures in the medium term are contained. in the absence of abrupt shocks, inflation is expected to drop further and stay within the target band of the bank of albania during the time span of the monetary policy action. risks distribution remains overall symmetric : slower than projected economic growth would lead to a rapid reduction of inflation, while a further consolidation of imported inflation could keep inflationary pressures high for

to an extent that could improve the access of banks in stressed countries to private and perhaps public debt and equity funding. my work on developing countries long ago convinced me that cross - border involvement of supervisors can help local supervisors achieve the distance and scepticism that can often be needed to detect under - assessed risks in a banking business, especially in the midst of an bis central bankers ’ speeches unsustainable boom. moving to a single supervisory mechanism will tend to achieve this, the main challenges being how to do so without losing what is equally essential, the nose for local detail, rumour and feel of the market. achieving the balance, which will require a subtle balance between national and central supervisors, will not be easy but can be developed over time. after all, the euro area is not the only entity covering thousands of banks in which centrally controlled supervision is in place. to what extent is this likely to represent an intrusion into what should properly belong to a national policy arena? i am doubtful that there is any intrusion at all. safety and soundness of banking is a common goal of bank supervision : non - market goals of public banking policy can be effected through taxation or other means. assessing creditworthiness and balance sheet risks is not really something that i believe has much room for national exceptionalism. expectations with regard to the likely roles of a common deposit insurance scheme and of a common bank resolution agency are still diffuse, i feel. deposit insurance of the first €100, 000, currently provided at national level, offers peace of mind to retail users of banking services, and a strengthening of the perceived backstop by pooling the responsibility and resources for payouts could help this, especially at a time when the creditworthiness of some national governments has been called into question. but it is well to understand what a common deposit insurance scheme can and cannot deliver. deposit insurance does not fully protect banks and banking systems against wholesale bank runs, which are typically much faster and larger than anything generated by retail holders. there is also the danger of divergent expectations with regard to the intended operation of a resolution agency. if greater private sector involvement in burden - sharing of future banking failures is envisaged, and if the single supervisory mechanism is sufficiently proactive and prompt in identifying the need for and taking corrective action, then it will not require or use substantial public funds. but that is not how the recent wave of failures has been dealt with. can we be sure that enough will have changed