##ifying the asean export market from over - concentration in the traditional markets. asean is among the few regions to have a significant and growing trade surplus with china, reaching about usd 20 billion in 2005. meanwhile, the total trade between the asean - 5 and india has expanded by more than tenfold from only usd 2 billion in 1990 to usd 21 billion in 2005. in investment activities, japanese investors have had an early presence in most of the asean economies. this has generally reflected the diverse comparative advantage of asean economies that range from labour cost advantages to natural resources and the increasingly more deregulated and liberalised regimes. foreign investors have also leveraged their supply chain networks on the asean platform to take advantage of this diverse comparative advantage. even within asean, there has been an increasing trend of outward direct investment especially by malaysia and singapore, being undertaken to leverage on regional growth opportunities. greater regional financial integration while there has been a high level of economic integration, a more recent development has been the acceleration of regional financial integration. as high savings economies, this would facilitate a more efficient allocation of part of the surplus funds of the region into productive investments in the region. this would contribute towards lower financing costs in the region and reducing the risks while at the same time promoting the economic potential of the region. to facilitate financial integration, the liberalization of foreign exchange rules, the harmonization of standards and the removal of impediments to cross - border investment have been undertaken. the asean roadmap on capital market development has been formulated to foster alliances and linkages in the equity and bond markets among asean exchanges, including the harmonisation of regulations. in the equity markets, multiple listings are being promoted as regional bourses attract domestic companies in the region to list on their exchanges. the ftse / asean index and the ftse / asean – 40 index, launched in 2005, also serves to increase the integration of the regional bourses and to promote asean as an asset class. in the bond markets, the asian bond funds ( abf 1 and abf 2 ) initiated by the central banks aim to broaden and deepen the regional bond markets. meanwhile, the asian bond markets initiatives ( abmi ) aims to enhance the infrastructure, which includes plans to develop a regional credit guarantee mechanism, a regional credit rating agency and a regional settlement link to facilitate cross - border transactions. specifically, the asean roadmap on capital account liberalization, launched in 2003, aims to gradually achieve a freer flow

increase in consumption and private investments. the bank of albania deems that the financial setting - characterised by low interest rates and ample liquidity - should encourage banks for a more positive approach towards lending. banking sector ’ s soundness indicators have been improving, in response to economic activity recovery and other measures undertaken by albanian authorities. liquidity and capitalisation indicators maintain good parameters, whereas the stock of nonperforming loans - albeit fluctuating - has been put under control. our projections have not changed : the bank of albania expects economic activity to improve progressively over the medium - term horizon. this performance will continue to be sustained by stimulating financial conditions and growth of private domestic demand. it will contribute to the improvement of economic and financial equilibriums in albania and to the return of inflation to target within 2018. bis central bankers ’ speeches the realisation of these objectives requires maintaining the actual mix of economic policies. the monetary policy will maintain the stimulating trend over the medium - term horizon, while the intensity of the monetary stimulus will not decrease for some quarters ahead. on the other hand, the fiscal policy should maintain its consolidating trend. the balance of risks related to expected developments remains on the down side. the expansion of economic activity continues to be decelerated by the unfavourable economic performance in the euro area, which is further complicated by the brexit, as well as by the behaviour of economic and financial agents, who continue to show reluctance in undertaking long - term business projects. against this backdrop, the bank of albania deems that economic policies and structural reforms should focus on : – maintaining and further strengthening the economic and financial stability. – accelerating structural reforms, especially with regard to : improving the legal setting and business climate ; encouraging domestic and foreign investments, completing the infrastructure ; enhancing productivity ; and, improving the labour market. – expanding crediting, to support the country's medium - term development. issues related to credit growth were addressed at length in the albania financial forum iv. the forum's conclusions will serve as a road map in our joint efforts for lending to return to the desired levels. concluding, i would like to underline that the bank of albania will remain committed to maintaining price stability and strengthening financial stability in albania. in parallel, and in accordance with the engagements in the framework of this arrangement, the bank of albania will continue to work to further improve the regulatory framework and to further develop the financial infrastructure in albania. thank you for your attention! bis