gent sejko : the need for a retail payments market and infrastructure, and promoting financial literacy address by mr gent sejko, governor of the bank of albania, to the 5th meeting of the national payment system committee, tirana, 1 october 2019. * * * dear minister denaj, dear members of the national payment system committee, dear ladies and gentlemen, please allow me, at the outset, to express on behalf of the bank of albania our sincere appreciation for your continuous commitment and collaboration to achieving common objectives in the field of payments and beyond. the collaboration and discussion of development alternatives among the main market actors is considered as one of the main pillars for the success of the undertaken reforms. in this light, since 2015, the bank of albania has organised the national payment system committee ( npsc ) to support and contribute to increasing the security, stability and efficiency of the national payment system in albania. these objectives are rather important for the implementation of our monetary policy and for the financial and economic stability of albania, by building up firm foundations for development and welfare. i would like to highlight that the npsc is set up based on best international and european union practices. it is a strategic, consulting and communicating entity, whose decisions support the activities of the participating institutions in the area of payments. in this framework, it is worthy to note that during the five years of its existence, crucial results have been achieved, most noteworthy the approval of the national retail payments strategy ( 2018 – 2023 ). the insofar findings clearly evidence the low financial inclusion of the albanian population, not only compared with the european union, but also with regional countries. all these are reflected in a high use of cash in the albanian economy. empirical studies by the bank of albania in collaboration with the world bank group show that the use of cash in economy, beyond the diminishing effects on the mechanisms of the bank of albania used for maintaining price stability and safeguarding financial stability, and supporting economic development, has a real cost from its use as a means of payment, amounting to more than 1 % of gdp. furthermore, the use of cash may be seen as a promoter of informality in economy. hence, this strategy aims to establish a contemporary and comprehensive retail payments market, supported by safe and efficient infrastructures, as well as by a wide range of payments instruments and services that fulfil the needs of financially capable users across the country. this strategy, compiled with the valuable support of the

gent sejko : albanian economic progress in 2018 and banking industry challenges for 2019 address by mr gent sejko, governor of the bank of albania, at the year - end function organised by the albanian association of banks, tirana, 13 december 2018. * * * honourable aab chairman, your excellency, minister of finance and economy, dear senior representatives and colleagues from the banking system in albania, ladies and gentlemen, it is a special pleasure for me to participate and address this year - end function organised by the albanian association of banks. in my brief address, i would like to bring to your attention some highlights of 2018, regarding the contribution of the banking sector and the financial system, as well as some milestones set for 2019. let me first focus on the overall performance of the albanian economy. the overall performance of the albanian economy in 2018 was positive. economic recovery is tangible across all of its dimensions. the pace of growth picked up, employment increased, internal and external balances were strengthened, while the main indicators of the banking sector ’ s soundness have been improving. it is encouraging to see that the sources of economic growth are both increasing and well diversified. from the aggregate demand perspective, growth in the exports of goods and services and in the domestic consumption and investments continued to underpin economic growth. in the meantime, from a sectorial perspective, economic activity expanded, reflecting a more notable contribution from output in the industry sector and the services sector. lastly, judging from the performance of macroeconomic factors, economic growth was also sustained by a stimulating financial environment, more favourable performance of our trading partners, improved balance sheets, and a more optimistic view of enterprises and households on the outlook. all the above reasons fuel the optimism on the perspective of economic growth in the next year and onward. albania has reached, among others, an important milestone on its path to development and integration : the expected opening of accession negotiations with the european union. these negotiations should surely be viewed as an important development anchor and an additional guarantee for both domestic and foreign investors. the year just ending confirmed the stability of the albanian banking sector. it may be considered as a special year in view of important structural changes in the system, which are expected to be finalised in the next year. banking activity continued to expand, and the banking sector continued to be well capitalised, liquid and profitable. the npl ratio continued to improve, hitting a new record low for the last eight years, standing at