ardian fullani : overview of albania ’ s banking sector speech by mr ardian fullani, governor of the bank of albania, at the end - year reception, organized by the albanian association of banks, tirana, 23 december 2011. * * * dear bank executives, dear participants, this end - year event with the albanian association of banks, turned into a tradition of communication between the banking sector and the bank of albania, provides an excellent opportunity to make a short resume of the results achieved by this sector in this year as well as to identify its challenges in the upcoming year. the banking sector managed to finish off 2011 successfully. its role in supporting albania ’ s economic activity was crucial, while prudence was made to guarantee its financial soundness. in this regard, the supervisory role of the bank of albania has provided an extraordinary contribution. banking supervision has been proactive and preventive by creating, at the same time, the necessary space for flexible banking activity management. amendments to the law “ on banks in the republic of albania ”, a number of amendments to the banking regulatory framework as well as the physical interaction through on - site inspections have contributed to enhanced immunity and dampened negative effects generated by the global crisis. the bank of albania has periodically conducted stress tests on specific banks to ensure that the banking sector ’ s security and functionality is never put in doubt. currently, we are working for this project to be transformed into regional cooperation taking into account that same banking groups operate across the entire region. according to banks reporting at end - september 2011, banking sector total assets expanded 9. 5 % from year start and about 13 % from the corresponding period of a year earlier. the banking sector credit portfolio widened 9. 6 % during the year or about 15 % year - on - year, constituting 49. 1 % of total assets. during the year, lek - denominated loans increased more rapidly than foreign currency - denominated loans. the activity increase was sustained mainly by deposits increases, which constitute 81. 4 % of total liabilities. during the year, they were up 9. 7 % or 14. 1 % higher than the corresponding period of 2010. liquidity ratios are stable and are expected to consolidate following recent regulatory requirements introduced by the bank of albania. as at september 2011, banking activity made a profit of all 1. 3 billion and return on assets and capital was 0. 2 % and 1. 9 %, respectively. capital adequacy ratio was

ardian fullani : preconditions for inflation targeting in albania ( opening speech ) greeting speech by mr ardian fullani, governor of the bank of albania, at the open forum “ preconditions for inflation targeting in albania ”, tirana, 1 - 2 december 2005. * * * ladies and gentlemen, it is with great pleasure that i welcome you to the open forum “ preconditions for inflation targeting in albania ”. i am extremely pleased and proud that i have the honor to welcome so many distinguished national and international guests. for the bank of albania it is the first time to organize an event of this character and with so many distinguished guests. i am very grateful that you accepted my invitation and warmly welcome you. i look forward to hearing your comments on the proposals that bank of albania will be presenting today and tomorrow. there will be ample time to hear all your comments and to exchange ideas on albanian policies. our main theme in this forum is concerned with the principal objective of the central bank. according to our central bank law the principle objective of bank of albania is to achieve and maintain price stability. the regime we are going to discuss here for achieving this objective is inflation targeting. our present formal monetary policy regime is called a heterodox monetary targeting. but within the central bank we use even different names for it. some call the monetary regime a “ two pillar ” approach as it has features of monetary and inflation targeting. often also, the current regime is already referred to as inflation targeting. under the present monetary policy regime bank of albania adheres to a monetary program. monetary policy aims at administering the money supply and interest rates with the view of achieving price stability in the short to medium term. the exchange rate is freely floating. bank of albania is considering to move to a fully fledged inflation targeting regime. based on available information today, we consider this regime to be a good choice. we envisage moving smoothly to this new framework within a realistic time frame. i say here deliberately smoothly. many steps have to be made gradually in time. furthermore we have to analyze carefully all the new information that will become available to us. the main reasons for adopting inflation targeting concern ( more ) transparency and ( more ) credibility. the central bank wants to move to a more transparent monetary policy regime with a strong anchoring of expectations over the medium term. according to bank of albania, inflation targeting is considered to be the appropriate monetary policy regime for albania in these respects.