, the share of banking sector assets stood at 92. 5 % of the gdp. the activity of the banking sector was stable, reducing the risks to financial stability. in particular, the credit risk marked significant reduction in this year. the ratio of non - performing loans fell to 13. 2 % at the end of the year, down by around 5 percentage points from a year earlier. the liquidity risk in banking activity continues to be low, while the banking system exposure to market risks remains present and subject to monitoring. the improvement of the cyclical position of albania and the encouraging signals on the economic growth outlook have also reflected the results of the work of the bank of albania. let me explain in greater detail. 2. bank of albania activity highlights in 2017 the activity of the bank of albania has been and remains oriented toward fulfilling our mission and legal obligations. regarding the operational aspect, our activity in 2017 was guided by the medium - term development strategy 2016 – 2018. the two main aspects in our activity were monetary policy and banking sector supervision and regulation. 2 / 6 bis central bankers'speeches the monetary policy of the bank of albania continued to maintain the accommodative stance during 2017, in the presence of still incomplete utilisation of production capacities and weak inflationary pressures. the monetary stimulus was transmitted through maintaining the policy rate at the lowest historical level, at 1. 25 %, increasing the volume and average duration of the liquidity injected in the interbank market and the forward guidance tool. the positive effects of the monetary policy were present in several aspects. first, in lower costs of financing consumption and investments. the volume of lek credit to the private sector increased by 7. 2 % in 2017, providing the main contribution to total credit growth. second, in reducing uncertainties of economic agents, encouraging them toward consumption and investments. third, in mitigating appreciation pressures of the exchange rate, contributing to the improvement of the balance of trade exchanges and further growth of economic activity. fourth, in strengthening of financial stability. the financial environment with low interest rates has improved the financial balances of borrowers, through boosting aggregate demand, easing the service cost of debt, as well as encouraging the restructuring of existing loans. our assessments on the monetary policy impact show that its contribution to economic growth for 2015, 2016 and 2017 is around 0. 2, 0. 4 and 0. 7 percentage points, respectively. also, the bank of albania has continued the efforts to improve the

monetary policy transmission mechanism. throughout 2017, we have worked on three main aspects : first, promoting the use of the national currency. the high euroization renders the monetary policy pass - through more difficult, as it exposes the private agents and the financial system to exchange rate volatility. aware of this fact, the bank of albania, the ministry of finance and economy and the albanian financial supervision authority signed a memorandum of cooperation “ on increasing the use of the national currency ( all ) in the albanian financial system and economy ”. in this memorandum, the signatory institutions commit to identifying and undertaking actions within their area of competence. in this framework, the bank of albania identified a package of measures, following the consultations with the banking industry, and which shall enter into force over the second half of 2018. second, enhancing the appetite of banks to expand lending. banks ’ appetite for lending continues to remain relatively low, by reflecting the effect of two factors : ( i ) deleveraging policies for reducing exposure in the countries of the region, including albania, implemented by parent banks from the euro area ; and, ( ii ) perception of credit risk at home. the bank of albania, to address this issue, has continued the collaboration with the european banking authority supervisory college, to exchange information and harmonise the supervisory policies. also, our institution continues to implement the measures set out in the national plan for reducing the non - performing loans and improving the lending environment. third, fostering the development of financial markets and expanding the range of financial instruments. in 2017, the bank of albania, the ministry of finance and economy and the world bank explored options for developing the secondary market of government securities and improving the functioning of the primary market. this project will help to : increase the government securities trading ; enhance the investors ’ base, and better manage the liquidity. 3 / 6 bis central bankers'speeches regarding the financial stability, the bank of albania has continued to implement a prudential and pro - active regulatory and supervisory policy. in 2017, fourteen full - scope and partial examinations were performed in banks, non - bank financial institutions, and savings and loan associations. the examinations showed that the performance of the banking sector improved in terms of : the quality of internal policies and their implementation ; the establishment of adequate risk management processes ; and, the implementation of the supervisory regulatory framework. moreover, the non - bank financial institutions are assessed to have still space to ensure proper effectiveness, independence and authority. the