with the fiscal policy, without losing its independence. incorporating this understanding in the central bank theory and practice requires some adjustments and flexibility but, at the same time, requires that central banks preserve their focus and independence and acknowledge their limitations. altogether these changes will allow the central bank and its inflation targeting regime to become a useful tool at the hand of the monetary authorities to preserve economic and financial stability in the post - global financial crisis period. thank you very much for your attention! bis central bankers ’ speeches

asset prices and financial frictions. under the current conditions, the largest central banks in developed countries have stretched central banking theory and practice beyond traditional activities. their balance sheets have increased beyond imagination and, in some cases, include private assets ; they have accepted a much broader role and have assumed more responsibility. this all new and untested type of central banking will have a strong impact not only on the nature of monetary policy and its interaction with other central bank objectives but also on the independence and credibility of the central bank itself. the nature of future monetary policy will largely depend on the success of the largest central banks to get out of this situation in a controlled and timely manner, without causing excess inflation and damaging central banks hard - earned credibility. these developments will affect monetary policy in the emerging markets through interest and exchange rates, but most importantly in the way central banks conduct their monetary policy. influenced by current practices of leading central banks, some other central banks have reoriented their objectives and engaged in activities which are traditional for development banks and governments. we have been careful to stay away from adopting and targeting such objectives not only in monetary policy but also in our macro - prudential policy. the bank of albania has traditionally based its policy on two important pillars. our first focus has been to achieve our inflation target and manage inflation expectations to preserve the purchasing power of our currency. this policy has simultaneously provided necessary stimulus to economic activity. second, our focus on banking supervision and financial stability has enhanced the confidence on our financial system and therefore increased the efficiency and credibility of our monetary policy. as i have said in april of 2008, during the annual conference with the banking system in albania, “ every investment we make today in financial stability yields increased efficiency in our monetary policy ”. bis central bankers ’ speeches recently, the bank of albania has introduced financial literacy as a third pillar of our policy and independence. this objective is founded on my belief that the first two pillars gain sustainability only if the public understand the role of the central bank, its independence and its policy. last but equally important, i would like to emphasise the need of cooperation and coordination with the fiscal policy. fiscal policy and its impact are facts of life which can ’ t be ignored. therefore, monetary and macro - prudential policies have to be designed and implemented in full awareness of its existence. a central bank does not live in an isolated island ; its success will, among others, depend on its ability to act in coordination and cooperation