ardian fullani : improving the performance of albania ’ s banking sector speech by mr ardian fullani, governor of the bank of albania, at the year - end event with the albanian association of banks, tirana, 17 december 2013. * * * dear bank executives, your excellency ambassador sequi, dear mr. ilahi, dear mr. pencabligil, it is a pleasure for me to participate in this year - end meeting, as we reflect about the challenges we faced and the objectives we accomplished in this year, and endeavour to identify issues that may arise over the next year. given the celebrations time and the spirit of this meeting, i would rather not dwell upon all the issues i would have liked to. however, i will share with you my opinion on two issues i consider as important for a good performance of the banking sector over 2014. before moving on, we should acknowledge that the year we are leaving behind was a difficult one for the banking sector. in its development cycle for over more than one decade, this year, the banking sector ’ s growth slowed down sharply and annual lending levels contracted. deteriorated asset quality, dictated by credit, has led to lower financial profit due to higher provisions needed. these developments have reflected the overall economic slowdown and domestic demand drop resulting from lower private consumption and investments. however, other developments highlighted the banking sector ’ s capacity to properly respond to and cope with these challenges. the banking sector has maintained ample liquidity and capital levels thanks to the further rise in public deposits and added capital by parent banks. in terms of non - performing loans, obvious efforts have been made to restructure credit and sell off non - performing loans to non - bank financial institutions. the albanian association of banks has played an active role in discussing the problems with relevant authorities and identifying solutions through the regulatory treatment of nonperforming loans, notably, the legal amendments to collateral execution process, which entered into force in september 2013. through its activity, the banking industry may transform 2014 into a better year for both the banking industry and the albanian economy. i think that this may be achieved through harder work in the following aspects : the first aspect pertains to restoring lending to adequate levels in albania. this objective may be achieved by interlinking these three elements : a ) cleaning up balance sheets from non - performing loans. it is indispensible that you should mark evident progress during 2014 to write off loss loans from their balance sheets

established dictators with a key role in the politics of oil ; the death of a tinpot dictator in north korea ; the spectre of an unpredictable iran joining the nuclear club ; currency and capital markets in the doldrums but with nervous twitches as they see - saw between risk - on and risk - off modes ; gold bugs having a field day – goldfinger ’ s dream of world domination at last coming true? – as even the respected world bank president re - discovers the merit of a gold - exchange standard to combat exhorbitant currency volatility ; the euro doing very poorly with the prospect of its implosion leading to an explosion of summitry, but with sophistry more in evidence than solutions – all this, and more, against a back - drop, at the global level, of the world trade system still pursuing the elusive closure of the doha round and, at the local level in many countries, an amorphous “ occupy ” movement gathering momentum to vent its frustration against all manner of crisis - related ills, real or imagined. fact was indeed stranger than fiction. our unfortunate script - writer would, in all likelihood, have been black - listed forever for bringing hollywood and the guild of screenwriters in disrepute if he had also had the temerity to include in his screenplay of global financial and economic mayhem affecting the major countries and their systemically - important institutions a tableau with a starkly contrasting narrative : a tiny ultra - peripheral economy with a population of just 1. 3 million ; a fruit - salad of a nation with a rich diversity of languages, religions and ethnicities, and democratic to a fault ; a success story sans pareil of : structural adjustment, demographic transition, diversification away from mono - crop dependence on sugar, export - driven industrialisation, off - shoring from banking and finance to business processes, and of economic transformation generally as it bis central bankers ’ speeches weaned itself away from trade - preferences to the post - wto world ; an economy that has kept growing throughout the crisis when bigger economies contracted ; an unemployment rate that has stayed below 8 per cent ; an inflation rate that has tumbled from 10. 9 per cent in april 2007 – the date of the establishment of the monetary policy committee – to a historical low of 0. 1 per cent in october 2009, to reach 4. 8 per cent in december 2011 ; a total public debt of less than 60 per cent of gdp,