complete economic infrastructure of the country, which would raise the formality of the economy and would accelerate the economic growth rates of the country. - credit extension has increased fourfold during four last years, but this has not influenced on interest cut : is this normal? it is true that during last years we have had a rapid credit growth. during 2005 credit increased by all 57. 6 billion or about 82 percent in annual terms, whereas during 2006, it increased by 70. 2 billion or about 55 %. upward trends are as strong even in the first half of 2007. according to latest estimates, credit balance at end of 2007 will be around 21 percent of gdp. without doubt, this view reveals that albania, likewise most similar countries, has entered into the group of countries with high growth paces of credit to the economy. the first cause listed by experts is the so - called “ catching – up process ", which in other words means high growth caused by a rather low starting base. naturally, there are also other factors, such as : macroeconomic stability, the maintaining of inflation under control, low interest rates in albania, europe and the usa, exchange rate stability, increased banks ’ ambitions to lend and the public confidence in receiving credit. the banking system development in the recent years, its successful privatisation and the process of consolidation characterising it in 2006 are other factors that have influenced on rapid credit growth. also we may mention the introduction of new credit products, such as consumer loans, house loans, and the efforts to make them more popular through aggressive marketing forms. rise of credit to the economy at so high levels carries over the potential of cutting the interest rates through which it is offered. referring to bank of albania statistics, if an all loan of 6 - 12 month maturity at the beginning of 2002 was given on average by above 18 percent rate, in april 2007 it was given by only 10. 16 percent. however, we should be prudent and always bear in mind the fact that about 75 percent of credit is in foreign currency and therefore, in forming the price of this kind of credit, banks refer to international financial market rates, such as euribor for the euro and libor for the american dollar. what is evidenced recently, thanks to increasing competition, is that all credit rates as an average expression of new credits have remained almost constant during the latest years, though euribor has increased almost throughout the whole period. - is the default risk the one that keeps high

ardian fullani : health passes through.. bank interview given by mr ardian fullani, governor of the bank of albania, to klan magazine, published on 23 june 2007. * * * - mr. fullani, initially we would like to listen to your comment about the efforts of the government to channel financial business transactions through banks. is this effort somewhat strained, given that the other party ( the business ) expresses itself that high transaction commissions of commercial banks increase business costs and the banks themselves are not ready to carry out the transactions? the channelling of financial transactions through the banking system, as a process already tested and under development, is a much expected action, which outside the propaganda contours will really contribute to weakening of the infrastructure that nourishes the informality. in recent years, the banking system has passed through an irresistible process of development and consolidation. actually it may be stated without hesitation that the banking system in albania is completely capable of encountering with dignity this requirement of the time. dealing briefly with two or three important moments, i would start with the operation of two modern payment systems : albanian interbank payment system ( aips ) where gross and real time settlements are made, and the automated electronic clearing house ( aech ) ( smallvalue payments of clearing systems ). further on, i would highlight the significant growth of epayments, the entry into the system of two well - known international banks, the increased number of branches, as well as increase of atms and pos terminals for card payments in the whole territory. encountering successfully the channelling of public sector salaries through bank accounts, followed also by those of the private sector and by a number of other banking services, i think are indicators of the proactive, ever increasing role of the banking system. to clearly understand what progress we have made so far in this direction, it ‘ s worth mentioning some statistics. the number of payments processed in aips system has increased by 11 percent, while the value has increased by 21 percent compared to 2005. in the meantime, both systems, the aips and the aech have a much higher capacity than the current number of payments processed in them. at end of 2006, compared to end of 2004, the number of p0s terminals was 7 times higher, while the number of electronic cards in use has increased more than 10 times and the transactions carried out through them was above 12 millions, with a value of about all 188 billion. during 2006