the albanian authorities have engaged in comprehensive reforms of the property rights, of the tax regime, of the electricity sector, of the general infrastructure, and remain engaged in the fight against informality. the most recent measure in this regard is a banking sector regulation that aims to put an end to the practice of lending through uncertified company balance sheets. further, to enhance efficiency and tackle corruption and informality, a determined drive to improve the functioning of the public administration, which broadly speaking encompasses also the judicial system reform, has been undertaken. in order to increase economic stability and to improve financial resilience, we have initiated a wide ranging set of reforms. to that end, the government has improved its public finance management procedures, has adopted a fiscal responsibility framework, and has undertaken measures to reduce debt. the bank of albania has strived to model itself after the ecb. its professionalism has increased while its independence, transparency and credibility have all improved. through a joint effort of institutional stakeholders, we have 2 / 3 bis central bankers'speeches managed to reform the financial supervisory authority and enhance the role of the deposit insurance authority. together with the albanian government, we have implemented a comprehensive npl resolution strategy, which has already brought encouraging results, we have approved a bank resolution law and we have jointly designed a de - euroization strategy, aimed at tackling financial vulnerabilities, improving the transmission mechanism and intensifying the use of the domestic currency. we have also established a new interinstitutional financial stability advisory group, vested with coordination powers on systemically - important stability – related issues. in order to further develop financial markets, the albanian authorities have accelerated the development of capital markets, through the establishment of the albanian stock exchange, the licensing and functioning of several investment and asset management funds, the encouragement of the on - going consolidation in the bank and non - bank financial institutions, the tax encouragement of private pension schemes, the on - going efforts to improve the functioning of secondary markets for government papers, etc. however, i am convinced the sharing regional experience would result in an additional impetus to the process. furthermore, regional solutions can be sought to common problems. this brings me to my last point. improving regional cooperation coordination and cooperation cannot run standalone in an ever integrated and intertwined world. the same concept applies to our region, where policy initiatives, aimed at achieving a common objective, should be implemented jointly. let me highlight a few potential cooperation areas : first,

to dampen inflationary pressures, in view of the importance of domestic demand in price dynamics. chart 23 gdp deflator and contributions ( annual percentage changes ; percentage points ) sources : eurostat and ecb staff calculations. latest observation : q2 2019. external factors have also been influential in determining financial conditions in the euro area, which are crucial when deciding on the appropriate monetary stance. for instance, chart 25 shows the joint movement in ten - year bond yields for the united states and germany. both markets have seen a considerable decline in yields during 2019. a possible interpretation of this joint movement is that investors have downgraded estimates of trend global growth prospects, which feeds into lower estimates of equilibrium real rates and a reduction in expected inflation rates. in turn, investors expect central banks to react ( both now and in the future ) to lower growth and downside inflation risks through accommodative policy rates and balance sheet policies. finally, as discussed earlier, the common factor in bond yields is reinforced by international arbitrage, by which lower yields in one currency area also put downward pressure on yields in other currency areas. taken together, the combination of weakness in the externally - oriented manufacturing sector but resilience in the services sector means that we expect the euro area economy to continue growing, albeit at a slower pace. in parallel, the inflation momentum from strong domestic demand and an improving labour market is being partly offset by the downward revision to manufacturing and aggregate output. in view of this disruption to the inflation path, the ecb governing council decided to strengthen its accommodative policy stance in its september meeting. chart 25 euro area and us long - term yields ( percentages ) sources : bloomberg and ecb. latest observation : 20 september 2019. conclusion in summary, the current economic situation vividly illustrates how global macroeconomic and financial developments can play a central role in influencing monetary policy decisions, even for major central banks. simply put, global developments cannot be ignored, to the extent that external factors filter through to the outlook for domestic growth and inflation. accordingly, globalisation requires central banks to pay increased attention to how foreign factors spill over to the domestic economy and financial system. at the same time, in the other direction, it is also necessary to incorporate the feedback loops by which domestic monetary policy decisions affect the global economy and global financial conditions, which in turn spill back to the domestic macro - financial configuration. finally, the international interdependencies in monetary policy