system total assets. assessments and studies of the bank of albania, as well as comparative studies by third parties, particularly by the international monetary fund, show that the financial distribution and expansion in the albanian financial market is close to the equilibrium, dictated by the albanian economy and consumers. moreover, financial intermediation indicators, as a percentage of the gross domestic product, are at similar levels to those in other countries of the region. the dominance of the banking segment has naturally led to a higher level of concentration of financial products and services in its favour. more than 80 % of resident investments in the financial system are in the form of deposits and current accounts in banks. only little more than 12 % are in the form of government securities, whereas the rest, around 6. 5 %, are invested in investment or private pension funds, accounting for only 0. 1 % of total financial system assets. statistics show that only a small number of companies operate in other segments of the financial sector, and their activity in terms of the domestic product or of the financial market remains insignificant. regarding the above, we may logically conclude that the financial market architecture may not be considered complete yet. financial instruments with long - term maturities are rare, whereas the short - term ones outside the banking system are apathetic and fragmented, in terms of both products and markets. an outcome of such a financial architecture is a kind of added pressure on the banking system, depriving the economy of other financing alternatives, beyond what the banks offer. this vacuum may not be filled with strained efforts by the banking system. it has been broadly accepted that each segment of the financial market plays a complementary rather than substituting role. i could mention a number of examples to illustrate my point, but for the moment i would rather not, as in the next panels these issues will be discussed in greater detail by other 2 / 4 bis central bankers'speeches colleagues and academics during the day. overall, the above elaboration regards investment - related financial institutions and financial instruments. however, it must be noted that similar problems characterise the other extreme of the financial market, the corporate – or enterprises sector – as we call it in albania. bank of albania surveys show that micro units face shortage of financial resources and have limited access to credit. thus, more than 1 / 3 of respondent enterprises consider the low level of access to finance and the cost related to it as the main cause for not expanding the activity. these micro units, which

generate further increase in productivity and competitiveness. at the same time, income from the export of goods, and especially of services contributed to the reduction of the current deficit and the strengthening of the external position of the economy. the effects of the monetary policy have maintained the stimulating trend, aiming at closing the negative gaps of prices and output. financial stability is also characterised by a positive situation. the notable decline in nonperforming loans in the balance sheet of the banking system is the most prominent achievement 1 / 4 bis central bankers'speeches in this aspect. the measures taken in mid - 2016 have produced a substantial effect, materialised in the reduction of non - performing loans by around 10 percentage points, below the maximum level registered in 2015. it is always a pleasure to note that credit growth has been positive. in particular, the lek credit has grown rapidly, compared to the foreign currency credit, which makes the banking system and the private sector healthier, and enhances the effectiveness of bank of albania ’ s monetary policy. positive developments in the banking sector and the economy have supported the further improvement of capitalisation, liquidity and profitability indicators. two months from the end of the year, in our assessment, the banking industry in albania enjoys full financial soundness, against the backdrop of an optimal liquidity and capitalisation situation, a key prerequisite for financially supporting the economic developments of the country. we have also paid particular attention to legal, institutional, regulatory and supervisory developments, notably the drafting and implementation of the resolution law. dear participants, this year marked 25 years from the establishment of a two - tier system in albania, which stipulates the banking system as the provider of financial and banking services in the economy, and the central bank as the administrator of the monetary policy and regulator and supervisor of the banking system. this first step was followed by other steps related to other segments of the financial market, such as the securities and capital markets, including the establishment of the relevant supervisory and regulatory institutions. initiatives in these aspects have promoted a constant expansion of the financial market, in terms of both diverse institutions and number of financial products and trading volumes. yet, despite these developments, the financial system remains dominated by the banking system and relevant developments in it. the last financial stability report of the bank of albania states that banks account for around 90 % of total financial system assets, equivalent to 92 % of the gdp, whereas the rest of the financial sector shares only 10 % of the financial