the lending to the economy, introduction of atm and other new banking products etc.. banks with private albanian capital, that have been licensed in the last three years, have been active in trying to position themselves in these changing market. they offer a full range of banking services, having the advantage of better understanding the local environment. despite the above achievements, the economy is still fragile and considerable progress is needed to establish an attractive framework favourable to investment and sustainable growth, driven by private sector development. customs procedures, tax administration, land and construction permits, sector licensing, and the judiciary system are the major obstacles to investment in albania. what can the central bank governors do to continue to encourage this new growth? are there any downsides? governance and institution building reforms remain critical for developing a rules - based business climate and attract increasing levels of investment. under this framework the bank of albania is committed to go ahead with additional structural reforms to enhance banking sector intermediation and financial services provision. in close consultation with commercial banks, governmental institutions, and the private sector, the bank of albania developed an action plan for increasing the use of the banking system in the regular conduct of business. regarding an important aspect of our central bank, the banking system stability, a lot of work has been done to encourage the development and consolidation of a sound banking and financial system for the country economic progress. measures supported by the bank include the privatization of the savings bank, the development of a deposit insurance system, improvement of the bankruptcy framework and collateral enforcement, and strengthening of bank regulation and supervision, which will also assist the government ’ s anti - money laundering efforts. the imf has provided technical assistance to the bank of albania. the imf has also funded a resident adviser to support the implementation of the institutional development program for banking supervision developed by the bank of albania in the wake of the large savings bank privatization, the financial sector is showing welcome dynamism and the boa is stepping up prudential vigilance. the recent fsap exercise will certainly help to advance reforms in the financial sector. bank of albania is also committed to increase the mutual relationships with all international partners. we are trying to be a real partner in the discussing table, arguing on the economical - financial policies, through presenting its solution alternatives, being elaborated not only on the economic logic base but also on the albanian reality. i am satisfied that, in the end, albania is on the way to get a new prgf / eff arrangement with

, bank of albania has attempted to take all - encompassing measures aiming at strengthening its supervisory capacities, in order to ensure a solid, sound and efficient banking system. the banking system performance : during 2005 impressive developments have been highlighted. the up - to - now data indicate that credit to the economy has increased by about 3 - 4 percentage points of gdp, giving clear signals for a promissory excitement of the economy financing in the future. till august 2005, compared to last year ’ s end, the system assets increased further by 14. 5 per cent, while there was augmentation of banking products as well as extension of their network. compared to yearend of 2004, the banking system has attained an increasing profit level, at all 4. 65 per cent. return on equity ( roe ) has resulted 24. 8 per cent, while credit quality expressed as a ratio between ( net ) bad credit and total credit portfolio is only 2. 39 per cent, from 4. 2 per cent it was at the end of 2004. however, there is no room to be excited by figure euphoria, because credits are still new and their quality will have to carefully be examined. another significant development of the banking system relates to the client ’ s service, which through the electronic terminals is being obviously accompanied by the increased number of electronic cards in circulation. banks already provide debit and credit cards in cooperation with international companies such as visa card, mastercard and diners club. six banks provide the atm service and atms 1 / 4 reached the number of 180 by the end of august 2005, while points of sale reached the number of 391. of course, an important aspect remains also the further expansion and consolidation of the banking system. the geographical extension of territory coverage by the banking business, the strengthening of competitiveness, the introduction of new products without mentioning other recent developments, constitute an additional argument in the vital role the banking system has and will have to play in the future. the country ’ s map covering the banking business expanded further, including new regions ever covered before. at the end of august, the total number of branches reached 109 or 21 branches more than the end of the previous year. i seize the opportunity of this event to express that positive assessments about the banking system have been given also in the report prepared by both the world bank and international monetary fund, after conclusion of the assessment they formulated on the financial system in albania ( fsap ). of course, this is good