global financial crisis has affected the countries in our region, due to some weaknesses that were present during the growth phase. first, the closeness of our countries and the concentration of trade with the european union area, as well as migratory movements, have brought about a large use of the euro in the regional economies. economic growth has been financed, to a significant extent, by foreign resources, in the form of foreign - currency borrowing by the public sector, financial sector, businesses and households. a substantial share of the bank ’ s liabilities and of the loan portfolio is in foreign currency. foreign - currency lending has been dominant and preferable by parties. this was due to a combination of factors, such as positive exchange rate trend, lower interest rates and good opportunities of the banking sector to fund these loans in the bis central bankers ’ speeches wholesale markets. foreign - currency lending to the private sector and households were used to a considerable extent for consumption. foreign investments in the tradable goods sectors, which would contribute positively to trade balance, were less than those in the non - tradable goods sectors. this is the case of albania, bosnia - herzegovina or serbia. it is estimated that in terms of the stock of foreign investments, at end - 2008, the share of investments in the tradable goods sector ranged from 15 % in albania to 35 % in serbia. therefore, in the pre - crisis period, some of the countries posted steady and even upward trade balance deficits. second, notwithstanding the efforts to develop the financial market, the banking sector continued to dominate the financial system of the countries in our region. this is a phenomenon of developing economies, which shows the great dependence of economic development on the banking sector condition. the banking sector in some countries in the region is mostly owned by european banking groups. the financial crisis showed that the entry of foreign banking groups into a domestic market, besides advantages, it is also associated with elements of risk, which must be addressed duly and timely. third, the countries in our region have different needs for investments, highlighting those in road infrastructure, energy and health care. also, demographic developments, including migration, and slowing population growth trend, have brought about increased costs of public pension schemes and other elements of social protection. therefore, despite fiscal consolidation efforts, budget deficits have been present and steady all the time. during the financial crisis period, public authorities were committed to overcoming the situation. almost all governments of the countries in the region were committed to implementing

more opportunities in lek crediting. in any case, the process of analysis, assessment, follow up and evidencing the credit quality should be pivotal to relevant structures in banks and should be carried out with maximum seriousness and commitment, conform to supervisory requirements. in this process, cooperation is needed with clients that are facing temporary difficulties. however, in the case of non - performing loans, it is necessary to undertake envisaged and timely actions to execute the guarantees and other forms of collateral, in order to recover maximum values. these actions are important while the bank of albania deems that the crediting activity of the banking sector will continue to face a challenging environment and targeted improvements for the credit quality will require more time to be realised. in conclusion, let me underline that, movement in the above - mentioned directions make a complex process which requires a two - way commitment and cooperation. it is with pleasure that i find that cooperation between us and the banking sector is seeing progress, both in field of supervision and monetary policy implementation. i believe this cooperation will grow among supervisors in the south eastern europe. on behalf of the bank of albania i would like to assure you that we will offer full cooperation in this regard. taking advantage of this opportunity, i would like to underscore that the bank of albania will always respect the public expectations and will fulfil, on time, its legal responsibilities in terms of maintaining the banking system and price stability. i thank you for your attention and wish you success! bis central bankers ’ speeches