regulation “ on minimum requirements for information disclosure from banks and branches of foreign banks ” ; • approval of the regulation “ on transparency of banking and financial products and services ”. the entire package of regulations was launched in the open forum we had this spring with the banking system. this package aims to better discipline the banking system in terms of assessing credit risks, setting penalties for banks when non - performing loans increase, encouraging lending in lek and enhancing transparency with bank clients for each product and service. dwelling further on the issue of financial stability, i would like to underline that the bank of albania is scrutinizing cautiously the developments in the external sector of the economy, which for the moment remain a concern in terms of long - term developments in economy. the stable growth of imports in goods and services and the current deficit deepening require special attention. the main implications relate among others with the financial stability at home while they have their roots in the imposed correction of long - term imbalances within a very short period of time. triggered by the increase of real estates prices, the steady appreciation of the lek, workers ’ remittances and the rapid growth of credit and budget expenditure during the present year, the high current deficits have become a dominant phenomenon in the external sector of the economy. their automatic and abrupt adjustment would prompt the correction of exchange rates to the rapid and strong depreciation of the lek, drop in private and public consumption and reduced economic activity which could generate crisis in the external sector and spread to economy, hence, jeopardizing the financial stability at home. availing myself of this opportunity to address to the audience i would like to explore this issue further. skipping the theoretical arguments, i would note that the high current deficits mainly originate from the consumers ’ behaviour. in plain words, what i am trying to say is that in a general economic level we consume more than we produce. this extra consumption, which is mainly financed by borrowing, is mainly driven by our expectations for higher income in the future. that is, in a household level, there is deficit, triggered by the insufficient income to cover household consumption. the international financial crisis and the negative consequences on the global economic and financial activity stem from household consumption beyond the sources ( providing additional financing from banking loans ) and the rise of real estates prices. this consumption approach was followed by the increase of current deficit and long - term liabilities for households. when these liabilities exceeded the long - term

expected to help raise local currency funds for eligible mfis / mfbs. the loans portfolio under the guarantee scheme will be administered by banks. the facility will also help build links between micro borrowers and formal financial institutions. the familiarization of the bank with the client should eventually lead to the " graduation " of the borrower. the facility shall provide partial guarantee to minimize the perceived risk premium by covering part of the losses incurred on funds made available to mfbs / mfis with the advantage of leveraging the guarantee fund a number of times while keeping the incentive for banks / dfis to collect the loan. the lending of mcg facility will help these institutions to play their role in the growth of micro credit more effectively. the institutional strengthening fund 10. this fund is designed to build capacity of the microfinance sector. the fund is expected to enhance potential for growth and create depth in outreach by improving human resource quality, service delivery and increasing service availability to potential microfinance clients. the fund is established at the state bank under the uk government ’ s financial inclusion program that involved funds equivalent to pound sterling 10 million for institutional strengthening. the fund will provide grants for capacity building to generate on - lending resources through commercial sources, equity investments or deposit mobilization strategy through improvement in management, governance, internal controls and functions. the fund will also provide grants for employing cost reduction mechanisms for increasing outreach in rural and remote areas through product innovation, development or use of technology. in addition, the fund will provide grants for business development services to mfi clients or improving quality of services ; and developing capacity for transformation of mfis into licensed microfinance banks. 11. sbp has developed detailed guidelines, selection criteria and application format for isf. the fund will primarily focus on institutions that are already regulated, or are in the process of seeking a license or have solid plans for restructuring in the near future. sbp regulatory oversight will ensure transparency and good governance practices, which will ultimately lead to greater investment in the microfinance industry. moreover, isf is capped at us $ 1 million per year per grantee and subject to at least 25 % matching grant from the grantee. grants may be made on an annual basis and institutions that qualify for funding in a year may also qualify for funding in another year subject to good performance and submission of another successful proposal through the approved application procedure. improving access to financial services 12. this component is designed to enhance capacity of the micro