is a condition, in which an economy ’ s mechanisms for pricing, allocating, and managing financial risks are functioning well enough to contribute to the performance of the economy ” 1. this definition implies that the financial system is capable of accomplishing appropriately its three main roles. firstly, the financial system is capable to achieve effective distribution of economic resources over time. secondly, it identifies and manages appropriately financial risks. thirdly, it can softly absorb shocks and surprises that occur in the financial system and the real economy. i think that the goal of this conference is to analyze financial markets concentrating on these three aspects, and to steer our efforts towards evaluating and guaranteeing the achievement of financial stability in our region. our economies are quickly developing, and they are experiencing rapid changes, and we, as representatives of central banking in our countries, must adapt to these changes and promote growth without losing sight of prudential supervision. latest trends towards expansion, liberalization and privatization of the financial system in the context of a fast - paced globalization of the world economy have put the goal of financial stability on top of the priorities in our region. during the last few years, the financial sector has recorded positive growth rates in all countries in our region. however, i think that the merit for such a growth goes to the most vital segment of the financial safeguarding financial stability, theory and practice ( 2005 ), international monetary fund, page 83, last paragraph. system, that is, the banking system. the key factor to the successful growth and consolidation of the banking system has been the rapid privatization of banks, which is, at present, almost complete. this process has opened the way to the arrival of well - known international banks that have brought foreign capital, expertise and confidence in the region. the entry of those banks, besides the positive aspect of fostering growth and development, calls for higher prudence in the supervisory role of the central banks. as a result of the above developments, the degree of financial intermediation in our region has further increased. credit to economy has played a considerable role towards the deepening of financial intermediation. albania has recently joined the group of countries experiencing a credit boom, as annual growth rates have been in the range of 60 - 70 per cent in the last two years. an interesting indicator of banking system transformation is the ebrd indicator regarding “ banking system reform and liberalization of interest rates ”, which combines the quality of supervisory and regulatory base, the ownership structure of banking

. recently we have made some concrete steps in this direction. therefore, the banking system is more extended geographically and richer in products. increase of assets, rise in the number of clients, modern infrastructure and other developments have made our contribution to cash reduction in the economy be significant. i believe that the above accomplishments, combined with determined administrative measures, will contribute to the closure of informality gates one by one in the economy. however, i observe unexploited space particularly in terms of : increasing opportunities for more electronic payments ; the last year overturned the ratio in the favour of electronic payments, when their level reached the figure of 320 thousand as compared to the number of 300 thousand of payments effected at the windows. this is an encouraging sign, urging us to better focus on this direction. channelling periodic settlements for utility services through bank accounts ; more concretely aec, alb telecom and water supplying should be related to the banking system so that their services are settled electronically. compulsory transfer of salaries of private sector ’ s employees through the banking system ; the so - far experience with the private sector resulted successful, while even some big private operators are applying this method efficiently. i think that the obligation to transfer salaries through the banking system will significantly decrease the evasion existing on income tax and social insurance contributions. i personally think that it is just the time to enhance popularity for imposing the creation of a banking culture and education. the obligation of each individual for opening a bank account in addition to an important massive service the state does to the population, is more than necessary. more concretely, i propose that new cards be associated with a bank account number. in conclusion, it is understandable that for being successful in the long run, more focus is needed on all the problems i briefly treated above. more loans, more prudence in the supervision, more qualified services, more free prices, less cash in the economy, more banking business, will all lead to more access of the population into your business. i deem that this is an essential prerogative that ensures sustainable long - term development of the albanian economy.