ivan iskrov : strengthening the regulatory and supervisory capacity of the financial regulators opening remarks by mr ivan iskrov, governor of the bulgarian national bank, at the official opening ceremony of the twinning project “ strengthening the regulatory and supervisory capacity of the financial regulators ”, podgorica, montenegro, 15 december 2009. * * * dear twinning partners, your excellencies, ladies and gentlemen, we have gathered here to start the twinning project “ strengthening the regulatory and supervisory capacity of the financial regulators ” funded by the european union. it is my pleasure and privilege as the governor of the bulgarian national bank, which is the lead institution managing this project, to express on behalf of the management of the bnb our strong commitment to work with the twinning partners during the next 18 months to achieve the targeted results. in times of trouble when all financial supervisors are under severe pressure and when many projects in the financial sector tendered by the european commission failed to find interest among eu member states, we are committing our resources, our best experts, expertise and knowledge to this project. the republic of bulgaria supports the european prospects for the western balkans, and montenegro in particular. we strongly believe that our joint work will contribute to the country ’ s progress on the path of european integration. it is by all means a very ambitious project that includes more than 55 activities and benchmarks, more than 10 directives to be transposed, several legal acts to be prepared, and many internal procedures to be created for a better supervision that complies with the international best practices. this project comes at a very specific moment for the global financial sector. it aims to create conditions for long term economic stability and growth by strengthening the regulatory and supervisory frameworks of the capital and financial markets and by improving the institutional and regulatory capacities of the financial sector regulators to supervise financial markets and institutions in line with the eu acquis. therefore, the objectives of the twinning project are fully in line with the main lesson from the crisis – that stability and growth cannot be maintained without a stable and well functioning financial sector. first, let me present our consortium and the project team. the consortium unites the experience of a еurosystem central bank ( de netherlandsche bank ) – with a proven track record of successful technical assistance projects for accession country institutions – together with the expertise of the bulgarian national bank and the financial supervision commission, both having the most recent and relevant experience in eu harmonization in a new member state

crucial when european monetary policy coexists with national financial and labour market policies and where interests may not always be aligned. the embedding of slovak institutions in a stable european institutional framework therefore contributed to macroeconomic stability during the crisis and increased investment and trade. indeed, in comparison with the czech republic, which has very similar economic structures, slovakia has experienced faster economic growth since 2009. although the czech republic was able to pursue an independent monetary policy during the crisis, slovakia managed to maintain a 0. 9 percentage point advantage over that country in terms of average annual gdp growth between 2009 and 2016. 9 as a result, the gap between slovak and czech gdp per capita narrowed from 21 % in 2008 to 13. 8 % in 2017. 2 / 4 bis central bankers'speeches the importance of institutional quality for long - term convergence may slovakia ’ s success continue for many years to come. in the long run, though, it cannot be taken for granted that slovakia ’ s growth model will continue to deliver strong growth ; convergence with eu countries could slow. slovakia risks falling into the so - called middleincome trap, whereby middle - income economies tend to follow a lower growth trajectory. much of the country ’ s growth depends on its ability to attract foreign investment, skills and technology to raise productivity. however, the country has now started to experience a slowdown in foreign investment, technology diffusion and labour productivity. 10 for slovakia to avoid the middle - income trap, it could be useful to develop new strategies focused on domestic innovation. above all, this would lead to more productive firms, more private capital and more skilled labour to spur long - term growth. such improvements, however, often depend on setting the right institutional conditions. indeed, institutional quality has proved to be an important factor in achieving higher incomes in the long run. 11 factors such as inefficient public administration, weak control of rent seeking, tax evasion and corruption hamper competition and economic inclusion. slovakia ranks below the euro area average in some of these areas, as measured by the most commonly used institutional governance indicators. more importantly, while most other new euro area countries showed some improvement over the past decade, reform momentum in slovakia appears to have slowed after the euro was adopted ( chart 3 ). by improving in two key areas, slovakia could help foster the right domestic conditions for businesses to thrive. one area is improving the business environment. according to the world bank ’ s doing business indicator, slovakia ranks below the new euro