mechanism have to better serve the needs of our countries? bis central bankers ’ speeches • how were the effects of euro area macroprudential measures transmitted to our countries? how can we achieve better policy coordination with eu authorities? • what is our insofar experience of participation in supervisory colleges? how effective would you consider these colleges, and what are your concerns about their functioning? a clear understanding of each country ’ s perspective and experience so far shall be very helpful in that respect. i hope the discussions today will be of practical relevance, and allow us to converge on more concrete proposals for consideration in future vienna initiative meetings. in conclusion, i am confident that today ’ s meeting is an important step to build a regional approach for addressing our common challenges. sharing experiences will help us all to better understand our own national challenges through putting them in the right context. we may tap into significant synergies in this context, which may be leveraged only through constant cooperation. most importantly, regional cooperation is a prerequisite for achieving better coordination with eu authorities, through better technical expertise, comprehensive region - wide experience, and better negotiating power. as a member of the steering committee of vienna initiative ii, allow me to reiterate my commitment to be a good advocate of our common stance, in this authoritative forum. thank you! bis central bankers ’ speeches

ardian fullani : overview of albania ’ s recent economic and financial market developments speech by mr ardian fullani, governor of the bank of albania, at the technical meeting to promote regional cooperation in the framework of vienna initiative ii, tirana, 3 october 2013. * * * dear representatives of supervisory authorities, i take this opportunity to thank you for your participation in the first regional meeting on the vienna initiative. the performance of eu and regional economies over the last few years have clearly demonstrated that in europe ’ s highly interconnected markets, the financial tensions, regardless of their origin, go beyond local or regional boundaries. the euro area sovereign crisis, which started as a localized episode in the euro area periphery, evolved gradually into a european predicament involving almost all european union ( eu ) members, heavily affecting non - eu member countries in the cesee region as well. at the core of the transmission mechanism of financial pressures from eu to non - eu countries are large euro area banking groups, which operate throughout the continent with their branches and subsidiaries. in a matter of months, the sovereign - bank vicious cycle encompassing the euro area was exported to non - eu host countries, first through lower risk tolerance and second through interruption of lending to our economies by euro area banks that operate in our region through their branches and subsidiaries. in some countries, lending dampened in the form of the so - called deleveraging, i. e. reduction of lending by eu bank subsidiaries to non - eu host countries, through the simultaneous reduction of their foreign liabilities. in other countries, such as in albania, where eu bank subsidiaries relied heavily in domestic retail funding ( domestic deposits ), the reduction of lending occurred without the corresponding reduction of liabilities. this led to an outflow of domestic funding sources towards eu economies. in both cases, the phenomenon illustrates the reduction of banks exposure to risk, i. e. the derisking process, driven by financial pressures from the parent banks, which they tried to mitigate in part through their business strategy in non - eu host countries. this phenomenon was largely exacerbated by macroprudential decisions and regulatory incentives undertaken at the eu level. requirements of the european banking authority ( eba ) for additional capital on large internationally active banks prompted these eu - based banks to adopt restrictive measures on their activity in the periphery “ to save ” regulatory capital, under conditions when raising additional capital would be too costly or even impossible in the market. to illustrate the magnitude of