ardian fullani : recent economic and monetary developments in albania speech by mr ardian fullani, governor of the bank of albania, at the joint press conference with the albanian minister of finance and the imf mission chief for albania, tirana, 22 june 2011. * * * dear media representatives, in the last two weeks, a team of the international monetary fund ( imf ) led by mr gerwin bell, mission chief, visited albania. during this visit, we had intensive discussions on the current economic developments, the economy ’ s expected performance and appropriate orientation of macroeconomic policies. this visit in the framework of article 4 consultation focused also on structural issues of the albanian economy, highlighting the steps to be made for ensuring sustainable long - term growth. brief overview of key issues discussed first, the 2010 and early 2011 economic and financial developments showed that, overall, the albanian economy overcame the global crisis effects with success and has the prerequisites to generate economic growth in the period ahead. foreign demand was the main contributor to the 2010 economic growth, while the current year is expected to be characterised by a resurgence of domestic demand and slower growth rates of albanian exports. overall, the macroeconomic situation is balanced, characterised by low and controlled inflation ; safe, liquid and well - capitalised financial system ; improving financial markets ; and improved current account position. these developments reflect, inter alia, the relevant policies, which have proven effective in buffering large shocks from the global crisis. i take this opportunity to point out that the bank of albania ’ s efforts to keep inflation in check and anchor inflationary expectations, as well as its regulatory and supervisory measures to guarantee financial system stability managed to reduce shock - buffering costs and prevented undesirable consequences. second, as regards the economy ’ s expected performance in the medium and long run, the conclusion reached after the two - week long consultations was that the albanian economy is expected to remain in positive territory of economic growth. however, growth rates will clearly depend on the resurgence of the domestic demand, which is suffering from insecurity related to national and international developments. consumption and investments continue to suffer from added prudence by economic agents, while financial conditions and banking system capacity to credit the economy are improved. furthermore, higher inflation rates, noted during the first months of 2011, are expected to drop in the upcoming period. this reveals the foreign origin of shocks that have led to increased prices and reflects internal economic and financial conditions as well as our

european countries and the only non - eu country to have issued a green eurobond. the issued bond was worth eur 1 bn, with a maturity of seven years, at the lowest coupon rate of 1. 0 %. such a low rate is owed to strong demand of international investors who assess that serbia has excellent growth prospects. the issuance was aligned with the green bond principles of the international capital market association, with a clear obligation to use the funds exclusively for projects in the areas of renewable energy, energy efficiency, transport, water management, pollution prevention and control, circular economy, biodiversity and environmental protection, and sustainable agriculture. 2 / 4 bis - central bankers'speeches furthermore, in respect of fx reserve management, the nbs also has green bonds of high - ranking prime international issuers in its portfolio, thereby also supporting the green transformation. in addition, as a regulator and supervisor, we have conducted a survey among banks in serbia on how climate - related risks affect their operations and what are the activities they undertake in this regard. the preliminary conclusions of the survey indicate that : 1. the banking sector began to recognise climate risks in the context of the risk management system, and half of them defined the concept of that risk in their internal acts ; 2. more than half of banks expect a significant impact of climate risks on the bank's risk profile in the coming period, with the majority expecting that impact in a period longer than five years ; 3. a majority of banks have not yet included these risks in the scope of the bank's management bodies, nor in the system of reporting on risks ; 4. half of banks did not define any limits or restrictions arising from climate risks. other banks have mostly done this by defining exposure limits in the form of a target maximum value that needs to be reached by a certain date, or activity restrictions by defining a list of activities that are not supported. moreover, as an institution responsible for the financial system stability, we have been implementing advanced macroprudential stress tests of the banking sector's solvency and liquidity for a long time. as an additional step forward, within the new regional ipa project, we will work together with central banks from the european system of central banks to include various macro scenarios of the impact of climate risks in the existing framework. also, as part of cooperation, since july 2021 we are a member of the network for greening the financial system. this year, shortly after its founding, we joined