it creates a sufficient fund of financial savings to boost credit and investments in the country. in a shorter - term horizon, it induces lack of demand and makes economic growth difficult. on the other hand, the albanian business learned that the domestic market has limited abilities to generate a sustainable economic growth. as a consequence, it is showing a rising interest to industry and agriculture, as sectors that have a better development perspective and a larger market. the above - mentioned situation has important implications for the country ’ s development pace and macroeconomic policies. first, it implies that the country ’ s economic growth potential is lower in the medium term. in other words, the transfer of financial and human resources across sectors, acquisition of technologies and modern business practices, as well as exploration of foreign market penetration, need time and determine the economic growth rate. moreover, this development is faced with an unfavourable external environment, relatively high cost of funds and lack of domestic demand. recovery of previous development paces takes time. second, the higher propensity to save and increased risk premia restrict the ability of monetary policy to generate additional demand in the economy by lowering the key interest rate. global economic developments are optimistic. the euro area and the european currency appear more consolidated due to the ecb ’ s contribution and nation - wide efforts for fiscal consolidation. however, the optimism is fragile. central banks of advanced economies have stated clearly that they will continue to apply the quantitative easing, as long as inflation remains below the target and unemployment remains high. actually, the so - far solutions have been in forms never experienced before. in fact, they pose new challenges with regard to implementation and potential risk spillover effects projected in the long run. under these circumstances, the bank of albania, considering the situation as rather complicated and after an intensive work, has succeeded in designing a full package of measures. they aim to boost credit and improve micro and macroeconomic balances of financing the economy, about which i will inform you in the following. package of credit recovery the idea about the package that we are introducing today occurred last year, where we discussed, jointly with you and representatives of the ministry of justice, about legal amendments needed to promote collateral execution. since that meeting, our experts have worked intensively for enriching it and bringing it to today ’ s form. the package consists in three pillars : legal pillar ; monetary policy pillar and prudential pillar. i will dwell on them in the following : 1 – legal pillar

system that the operational framework we provide will maintain the same stimulating nature. it aims at preventing banks from any tensions, even sporadic ones, with regard to market liquidity adequacy ( its quantity, price and maturity ). 3 – prudential pillar while both first pillars impact indirectly and over an extended period of time, the prudential pillar impacts directly and swiftly on credit recovery. it includes a number of measures that will release financial resources to banks and will encourage them to channel those resources toward lending. regulatory changes are at the core of these measures : • reduced requirements for liquid assets by banks ; • changed risk coefficients in the investment structure to boost lending. the reduction of the requirements for liquid assets by banks may be carried out without infringing the stability of the system, since their level is generally higher than that of international standards and of banks in the region. moreover, given that banks operating in the country have their origin mainly in europe, this reduction may take place under the conditions of declining risk premia in european financial markets. however, it will be bis central bankers ’ speeches monitored and implemented according to each bank ’ s risk profile. this means that though the reduction may be general, the level of liquid assets requested by currency and in total may be different in different banks. change in the risk coefficients of the investment structure will take place, so that banks ’ capital better supports the shifting of their resources toward lending. more specifically, we propose significant increase in risk coefficients that are used for calculating the banks ’ capital, for new flows of bank investments with non - residents. this increase in risk coefficients may take place also for part of bank investment stock with non - residents, taking into consideration : • regulatory requirements for liquid assets ; • adequate coverage of bank liabilities to non - residents ; and • the time needed so that this shift does not cause any operational overburden to banks. on the other hand, risk coefficients may decrease in banks for the amount of new credit added to the existing stock, for a certain period of time. in this way, the intended shifting of funds toward lending in the country may be conducted even by those banks that have a lower capital adequacy ratio. these measures are not administrative. the decision to conduct funds shifting to private sector credit in the country will be decided by the bank itself. as in any other case, the bank should balance all the factors affecting risk, costs and benefits from such a shift. the implementation of the above