models provided by foreign banks, and particularly the bank of england, which at the time was the centre of the global financial system. as ismail bey vlora noted “... let me say with admiration that the work of the bank of albania is, both economically and politically, a second victory for albania, after that of independence ”. despite being established as a privately - held institution, the bank ’ s activity would not be oriented towards generating profit or other commercial interests. it would rather orient towards providing public goods, such as issuing the currency and acting as banker to the government, banks and other financial intermediation agents in albania. despite the numerous efforts, gaining independence did not bring the establishment of a national monetary system and albania continued to be one of the few countries still having a gold - based coin circulation system. the establishment of the central bank was vital to inspire the albanian public trust, by encouraging investment of savings in shares and bank deposits, hence turning the bank into an engine of the lending system in albania. if we look back in the past, we can see how much the albanian currency has evolved. from the declaration of independence – when gold and silver were considered to be the only real forms of money – we come to the present with the bank of albania projecting to put electronic money into circulation. unlike precious metals, which hold their value over the centuries, a currency ’ s value is equal to public ’ s trust in the stability of the economy and in the central bank putting it into circulation. it is this public trust that guarantees the stability of the currency and enables the development of a modern monetary system. the latter is the product of a long period of practical experience and a large number of economic studies suggesting that the central bank, through its monetary policy, contributes to improving the economic perspective and people ’ s living standards by preventing prolonged periods of inflation and deflation. in addition, price stability contributes to increasing economic activity and employment ; hence promoting economic welfare. firms and consumers make informed decisions about consumption and investment ; the market allocates the resources more effectively ; productive potential and incentives to invest in the economy increase ; while the redistribution of welfare and income improves, hence contributing to strengthening social cohesion. in order to facilitate monetary policy implementation and efficiency in the economy, the bank of albania pays great attention to encouraging economic and financial education in albania. bis central bankers ’ speeches we believe that broadening the basic knowledge on economic environment improves people ’ s ability to process the necessary information

a good deal of deregulation and liberalisation of previously sheltered sectors has taken place, there is still plenty of scope for further measures to increase the level of competition and stimulate entrepreneurial initiative. let me now shift the focus from structural to more conjunctural issues and briefly discuss the current economic situation. the first message i should like to convey is that there is good reason to remain confident that strong growth will be sustained in the euro area. euro area real gdp has been growing at an annualised rate of around 3½ % for four consecutive quarters, including the second quarter of 2000. some monthly indicators, which extend into or cover the third quarter of this year, point to some moderation of these high growth rates. in particular, the pace of growth in industrial production appears to have declined somewhat and some survey data showed signs of moderation. at the same time, however, confidence remains high, underpinned by positive factors such as high employment growth. the extended period of high and rising oil prices has certainly increased the uncertainty surrounding the sustainability of recent growth trends in the world economy. however, by contrast with previous periods of strong and prolonged increases in oil prices, the world economy is now less dependent on oil and inflationary pressures are still being contained. this should help to ensure that the impact of high oil prices on growth remains moderate over the medium term. all in all, the outlook is for the continuation of robust growth in the foreseeable future. turning to monetary developments, m3 growth has been deviating from the reference value of 4½ % since the beginning of 1999. the three - month average of the annual growth rates of m3 covering the period from july to september stood at 5. 4 %. over recent months, however, a moderation in m3 dynamics has taken place, as is visible in shorter - term growth rates. for example, the seasonally adjusted and annualised growth rate of m3 stood at 3. 6 % in september. at the same time, the recent increase in the growth rate of loans to the private sector should not be overrated. this was considerably influenced by the financing of the payments for umts licences by telecommunication companies. this does not imply high risks to price stability in the medium term as long as the proceeds are used, as expected, to redeem government debt. in sum, recent developments seem to indicate that, following the series of interest rate increases by the ecb, monetary developments are currently settling down at a more moderate