requirements of the regulatory framework. we would kindly ask you and your shareholders for dedication in this process, not only to find the necessary human and financial resources, but also the most appropriate forms for a quick, transparent, and consistent handling of non - performing loans. we need to bear in mind that lending carries along risks that are difficult to identify at the time of disbursement. these risks are determined not only by the quality of bank lending procedures, but also by significant external factors, including the performance of the economy. this uncertainty permeates the current phase our banking sector is going through. therefore, it is indispensable that bank management structures and their shareholders commit the necessary financial resources to cope with the possible additional costs in the future. for shareholders, this implies not only retention of profits in the bank, but also adding new capital in case of need. remember that it also represents a more general trend in the banking industry globally, with a number of new forthcoming standards that provide for improving the quality of bank capital and increase of its size. our banks should gradually begin to adapt to these new standards. for senior managers, strengthening the control systems of the bank activity remains a primary objective, especially for those activities that generate the main revenues and expenses arising from the activity. risk management structures should be really empowered and have a stronger voice in decision - making. banks should continue to further improve the efficiency of their operations, including the establishment of a better control over the costs of the activity. setting priority activities for your institution will allow you to identify new investment needs as well as those activities that use bank resources inefficiently ; they should, in turn, be restructured. this process will positively affect the financial performance of the institution, and will allow the implementation of other active policies in areas that benefit the activity of the bank. we all know that banking is an activity based on trust. for this reason, the bank ’ s services to customers should be “ first class ” across the entire bank network. this means that customers should be served correctly, timely and transparently. banking services should be provided in accordance with the clients ’ financial literacy, in any case highlighting, the benefits and the risks that customers may incur as they use your bank products. in the context of its role as the supervisory and regulatory authority of banking operations, the bank of albania will continue to carefully monitor and address the challenges facing this bis central bankers ’ speeches activity. our regulatory framework and supervisory and operational

ardian fullani : competition versus risk - taking in the banking sector in see countries speech by mr ardian fullani, governor of the bank of albania, at the conference on “ competition versus risk - taking in the banking sector in see countries ”, organized by the central bank of the republic of kosovo, prishtina, 5 october 2012. * * * honourable governors, dear participants, regular regional meetings are a good opportunity to discuss economic and financial developments in our countries. they help identify the similarities and differences among us, and the economic and financial policies we need for solving the problems we encounter. the geographic position and economic relations with the same trade partners are factors that have led to similar economic and financial developments across our countries. they have determined the nature and size of contamination from the global economic crisis, in general, and the euro area crisis, in particular. the impact of the crisis on our countries has often been the main topic of discussion in such meetings. macro - financial difficulties and uncertainties in the euro area render the actual european crisis the main focus of this meeting as well. actual operations and commitments of the european central bank consist in a wide range of instruments that european authorities may use to support financial markets and institutions. investors, however, are still waiting on additional decisions which will be more harmonised and stronger politically. the economic situation, especially in greece and spain, remains difficult, whereas portugal and italy have undertaken additional fiscal consolidation programmes. unemployment in the eu and the euro area has reached historic levels, especially amongst the youth. economic growth is weak and is mainly concentrated in central countries of the euro area. our countries have been affected by this situation for objective reasons. trade relations, movement of capital and workers, and the financial system are channels that pass these problems on to our economies. the form, size and extent of this impact have evolved over the past four years. at present, the situation is reflected in the decrease of domestic demand, decline of economic growth, reduction of available income, loss of confidence and deterioration of optimism ; this is, in turn, reflected in higher savings. consequently, these developments have placed the focus of economic policies towards economic activity and revitalisation of optimism in order to boost investments and consumption. on the other hand, maintaining financial stability becomes a necessity, creating thus a binomial of priorities that condition each other and require a simultaneous solution. the albanian economy is increasingly facing the challenge of economic growth. although the albanian economy enjoys consolidated macroeconomic stability