in the economy. interest rates in the deposit and credit markets followed the bank of albania ’ s easing monetary policy over the last six months, while its transmission is expected to be more complete in the future, conform to the time lag that characterises the monetary policy transmission mechanism. projections for the expected economic outlook in the future sustain our earlier assessments for positive, but below potential, growth of the albanian economy in the period ahead. however, risks about this scenario have increased, mainly as a result of unfavourable developments in the global economy and financial markets. overall, the economy in our trade partner countries is expected to be sluggish and lending terms in the euro area are expected to be tight for the period ahead. moreover, the space for fiscal stimulus has narrowed, as a result of the orientation of the fiscal policy towards maintaining fiscal parameters stability. under these circumstances, albania ’ s economic growth will be determined mainly by the performance of consumption and private investment. the latter is expected to be driven by eased domestic lending terms during 2012, but will suffer, at the same time, from the uncertainty and hesitation of consumers and private businesses. the bank of albania deems that the second half of 2011 marked a turning point towards a more normal consumer behaviour, which should be encouraged and supported in 2012. * * * taking into consideration the information set out above, the supervisory council holds that pressures on consumer prices at home remain low over the monetary policy relevant horizon and they have shifted on the down side over the past months. on the demand side, below - potential economic growth will continue to generate low inflationary pressures as shocks from the supply side are expected to be moderate. at the conclusion of discussions, the supervisory council decided to cut the key interest rate by 0. 25 percentage points bringing it down to 4. 25 %. this decision aims to provide the appropriate monetary conditions to meet the medium - term inflation target. in addition, the easing of monetary policy provides higher support for the development of the private sector ’ s demand in our economy. bis central bankers ’ speeches

supervisory practice improved, regarding the methodology for banks control, the approximation of standards with basel principles and the efforts to adopt the best international practices. particular attention was given to the consolidating processes and strategic plans of the banking system. also, the bank of albania, in 2017 : compiled and approved the macro - prudential policy strategy, which orients the use of regulatory instruments for enhancing the financial stability of albania ; prepared the regulatory framework on the internal capital adequacy assessment, compiled in the light of basel principles and eu directives. the internal capital adequacy assessment process complements the supervisory perspective with the self - assessment dimension of banks ; made significant changes regarding the prevention process of money laundering, through the revision of the relevant regulatory framework ; continued the work for the revision of the supervisory methodology on the assessment of the corporate governance in banks ; of the functioning and independence of their committees ; of the internal audit structure in assessing the risks and their functioning. in this project, we partnered with the european bank for reconstruction and development. notwithstanding the progress made in reducing the non - performing loans, attention has been paid to the achievement of banks ’ annual objectives regarding non - performing loans and the compilation of the recovery and resolution plans for larger borrowers. banks report regularly to the bank of albania on the level of their relations with every borrower, as well as the expectations and plans on future developments, in compliance with our requirements. with assistance from the world bank and the international monetary fund, a regulatory framework, aiming to foster banks collaboration and coordination for addressing common borrowers, is being compiled. the law ‘'on the recovery and resolution of banks in the republic of albania ” entered into force in 2017. this law designates the bank of albania as the resolution authority for banks and branches of foreign banks that conduct their activity in albania. this law is another step toward adopting the european standards in the regulatory framework of the bank of albania. in its role as the resolution authority, the bank of albania increases the security of the banking system. in parallel with the above - mentioned aspects of its work, the bank of albania has paid attention and has worked to : strengthen the development of the payment system ; improve the procedures and modalities for foreign reserve management ; improve communication with public ; deepen the research work ; expand and improve statistics ; increase financial literacy and financial inclusion ; collaborate with domestic and international institutions. i would like to highlight that bank of albania has been attentive