to free up resources that can be used to finance the new business model of the greek economy. thus, banks will play a key role in shifting funds from non - productive to productive businesses. finally, low deposit rates are allowing banks to reduce funding costs and, thus, to ease the cost of bis central bankers ’ speeches financing for both retail and corporate clients. these developments should have a positive impact upon operating efficiency and, eventually, the ability of borrowers to service their obligations. greek banks in albania now, let me say a few words about the greek banks in albania. greek banks comprise an important part of the albanian banking system as evidenced by the fact that they hold about 20 % of total banking sector assets. they are well - capitalized, mainly self - funded, and play a vital role in the albanian economy. however, individually their operations are rather small compared to those of other foreign banks in albania. therefore, some mergers may need to take place. in recent years, greek banks have spread widely in south eastern europe. however, few banks managed to obtain, on an individual basis, a substantial market share and size, which are critical factors for efficiency and profitability. this shortcoming has to be addressed. a stronger presence of fewer banks would be better not only for individual banks, but also for the market and the domestic economy. the benefits of consolidation can be seen in the greek banking market. a major challenge not only for subsidiaries of greek banks, but for the albanian banking system as a whole, is the rising level of non - performing loans. the rise in npls is a problem for most countries in the region, including greece. dealing with this situation is important for not only the robustness of the banks but, more importantly, for ensuring adequate credit supply to the real economy. it is for these reasons that the matter of effective management of npls is a top priority for the bank of greece. we have set up a plan to increase banks ’ efficiency in dealing with troubled borrowers. the frameworks that the banks will develop will, of course, be disseminated throughout their groups and will contribute to the efforts by all supervisory authorities in southeastern europe to address the common concern of nonperforming loans. finally, i would like to reassure you that greek banking groups have not engaged in excessive deleveraging and they are not going to do so in the future. in fact, there has been no “ home ” - bias in the loan deleveraging process

markets to greater competition leads to lower prices and higher - quality products, which translates into higher real incomes for most people. globalization has also changed the very structure of production both within multinational firms and between firms. it has become quite common for high - value u. s. components to be shipped to foreign destinations for assembly into finished products, many of which are shipped back to the united states. 21 this so - called round - tripping enables firms to take advantage of economies of scale at each stage of the production process as well as different wage and skill mixes in different locations. these changes in the production process are likely to be particularly pronounced within multinational firms. indeed, recent research shows that multinationals have made a disproportionate contribution to the acceleration of u. s. productivity since the mid - 1990s. 22 so if globalization has helped to increase competition and variety while lowering costs, why do so many oppose it? one answer is that competition and progress invariably produce winners and losers. even if all consumers gain, a few producers may gain a lot and few others may lose a lot. another answer is that, for the advanced economies, opening up markets to products from low - wage countries may disproportionately benefit those with the highest incomes, while greater immigration may hold down blue - collar wages, thereby creating greater inequality of incomes. economists who have studied rising income inequality in america generally conclude that, although international trade and migration have contributed slightly, the main factor by far has been progress in information technology, which has boosted the demand for educated workers relative to those with low skills. 23 yet another potential implication of globalization is that the distribution of incomes across countries will shift. professors edward leamer of ucla and peter schott of yale have recently suggested that the significant gains in chinese and indian per capita income over the past twenty years may have come at the expense of income growth in the so - called " middle income " developing countries such as argentina and brazil. per capita incomes in many middle - income countries have stagnated while per capita incomes in the industrial countries have continued to grow. leamer and schott argue that few chinese or indian products compete with products made in the industrial countries, whereas many chinese and indian products do compete with products made in the middle - income countries. 24 this is an interesting and provocative hypothesis, but as yet it has not been subjected to careful testing. in the realm of finance, globalization, on the whole, promotes diversification and