.. a sine qua non for sustained economic recovery following a financial crisis is a thoroughgoing repair of the financial system. ” from the perspective, in cooperation with the parliament, government and other public regulatory entities we have undertaken a series of legislative and regulatory initiatives, aimed at creating incentives for the recovery and assurance in lending. thanks to the reforms we have undertaken during this year, we have started to reap the first positive results as regards the situation of the non - performing loans. as a result, the ratio of the non - performing loans fell for the first time after almost seven years of continuous rise. the write off of loss loans, as i have explained in previous statements, was the finalisation of joint inter - institutional efforts. during this process, we have been assisted and overseen also by important international financial institutions such as the world bank and the international monetary fund. beyond the non - performing loans issue, the banking system continued to be well capitalised, liquid and financially sound. the issue of non - performing loans will require some more time to resolve, but this should not keep us from the recovery of the credit activity at home. for as long the positive performance of the other above - mentioned indicators continues, the banking sector has room and the potential to credit convincing projects and investments. in my judgement, it is important to administer with courage and persistence the prevalent perception that non - performing loan have forced banks to adopt a very conservative approach to lending. to permanently address this problem, additional measures have been taken and will be taken in the future. i would like to briefly focus on the latest initiative in this regard : a coordinated plan between the bank of albania, government of albania, association of banks, and international monetary fund, consisting in two main pillars : the first pillar relates to the drafting and completing the legislation that regulates lending from the moment of concluding a contract until the final repayment, including disputes among the parties. these changes aim at making more precise in legal terms all procedures related to banking activity, bailiff services, borrowers and other relevant state institutions. the second pillar is related to the regulatory framework of the activity of the banking system, therefore, related to the day to day activity of the bank of albania and the banking system. bis central bankers ’ speeches we have identified the regulations that will be subject to amendments. in addition to the objective for creating higher flexibility in relation to certain aspects of the activity in the treatment of the credit portfolio, we will aim at adopting a

new concept : the “ background check ( biografi ) ” of the client in relation to bank borrowing. we believe that this new element will help banks assess the borrowing potential of each client. in spite of what i said above, it is a fact that, recently, lending in the national currency has seen positive growth over the months. this phenomenon, among others, has been accompanied with a positive side effect at a higher speed and intensity in the pass through mechanism of the monetary policy in the economy. dear guests, as i pointed out, at the beginning, economic activity at home remains in a positive trajectory, but it has not yet reached the level we wish it were. research at the bank continues to confirm that the albanian economy has unutilised potential and that the closing of the gap remains the main challenge for policymakers. interventions through both the monetary policy and macro - prudential elements insofar have not succeeded to definitively close the gap. i listed these facts intentionally as the conference of this year is called “ do crisis change economic fundamentals? ” these interventions are main actions central banks are allowed by the legislation, and recommended by the most modern theory. if these interventions fail to introduce a long - term positive equilibrium for the economy, then a question arises naturally : what else should be done? the answer is in the phrase “ structural reforms ”. while the phrase may have often been speculated, the truth firmly confirms : only the willingness to project and undertake courageous and visionary reforms is the golden key to success ”. this fact was strongly emphasised in the final statement of the ministers of finance and central bank governors of 24 most developed nations, ( financial committee of the imf ) in the annual meeting of the imf organised earlier this month in lima, peru. a secure sustainable long - term growth requires timely - implemented and well - sequenced structural reforms which remain critical to raise productivity, potential output, and living standards ; they should bolster confidence in the economy and reduce social inequality. concluding, i would like to underline the support of the bank of albania for a series of reforms undertaken recently as part of the medium - term agreement between the government of albania, bank of albania and the international monetary fund. similarly to the rest of south east europe, albania needs a new path, in which investors will be able to see again profit opportunities. it is vital for all of us, for the region to detach itself as fast as possible from the perception as an