ardian fullani : albania ’ s financial sector development program opening remarks by mr ardian fullani, governor of the bank of albania, at the inaugural reception of the financial sector development program, tirana, 9 february 2012. * * * dear mr. spindler, dear mr. williams, dear ms. timofeeva, dear participants, it is a special pleasure for me to be here in this ceremony, which marks the commencement of a new phase of cooperation with the financial services volunteers corps ( fsvc ). this is evidence of the successful existing cooperation and our commitment to take it further in the future. the bank of albania has benefited largely from the cooperation with the fsvc. in concrete terms, this cooperation has focused primarily on strengthening the institution ’ s oversight function. the assistance from the fsvc has addressed specific training needs for the bank of albania ’ s supervision staff and has complemented with concrete activities other development projects we have had with the international monetary fund and the world bank. more specifically during this period, we have been assisted to draft and implement the supervision development plan in 2004 – 07, in the framework of the cooperation with the world bank. later, cooperation challenges and needs became more concrete and specific against the background of the proliferation of the international financial crisis, re - conceptualization of international banking supervision standards and re - assessment of the role of other public authorities working to maintain the financial system ’ s stability. during 2008 – 09, the bank of albania started the revision of the regulatory and operational procedures to make them more comprehensive and solid with a view to tackle extraordinary financial situations. in this context, the fsvc has assisted us with expertise to amend and upgrade the relevant manuals. in 2010, the assistance of fsvc was requested to perfect operational risk supervision and assess it infrastructure adequacy. in addition, during the same year, assistance was received as regards revising the credit risk manual. in 2011, cooperation between the bank of albania and the fsvc focused on boosting banking risk assessment, this time around on liquidity and market risks assessment. moreover, the assistance of fsvc has proven very useful for the regulatory and operational empowerment of the albanian deposit insurance agency ( adia ). i would like to underscore the appreciation of the adia and the bank of albania, as its supervisory authority, for the invaluable contribution of fsvc experts on drafting adia ’ s strategic development plan 2002 –

have triggered european banks to revise the model and expansion of their activity. in more practical terms, it implies that the presence of foreign bank subsidiaries in the countries of our region is subject to a careful assessment, to determine their effectiveness and business continuation. this process is not necessarily restrictive for the economies of our region, as it may generate processes related to banking consolidation or lead to new investors entering the market. the bank of albania is closely monitoring economic and financial developments in the countries where parent bank groups operate. we have undertaken over time measures that ensure the strengthening of capital and liquidity indicators and improve the resilience of both individual banks and the whole sector. at a more operational level, periodic analyses and other processes are under way, with a view to realising : i. a professional assessment of the financial situation and operational risks for individual banks and the whole sector ii. a comprehensive framework for addressing and mitigating risks facing the financial system stability. 4. main objectives for 2015 this was an overview of bank of albania ’ s activity in 2014 and of the first months under my governance. in conclusion, i would like to focus briefly on our main objectives for 2015 that stem from both legal obligations and the medium - term development of the bank of albania. first, monetary policy decisions will aim at anchoring inflation expectations close to the 3. 0 % inflation target. our projections suggest that the monetary policy will remain accommodative side in the period ahead. in our judgement, the current monetary conditions are adequate for the return of the economy to equilibrium and of inflation to target. however, within the legal framework that regulates the work of our institution, we are ready to undertake all the necessary measures for compliance with our inflation target. second, supervisory policies aimed at strengthening the banking system stability. main challenges facing the albanian banking sector are as follows : i. ensuring the return of a steady growth of lending ; ii. improving indicators of bank asset quality, in the framework of measures taken for cleaning their balance sheets, which are expected to have a positive effect on the operational efficiency and intermediation capacity of banks ; bis central bankers ’ speeches iii. mitigating effects arising from structural regulations imposed to eu - based banking groups in the context of reducing their exposure to subsidiaries outside the eu ; to safeguard the financial stability, the aim will be to further strengthen the inter - institutional cooperation with other financial supervisory institutions and international financial institutions. third, strengthening the system of management and internal audit, and institutional capacities