gent sejko : financial inclusion, governance, tackling nonperforming loans, and albania ’ s milestones for 2020 address by mr gent sejko, governor of the bank of albania, at the meeting organised by the albanian association of banks, tirana, 12 february 2020. * * * dear ladies and gentlemen, it is always a pleasure for me to attend meetings and round tables with representatives of banks operating in albania. they are also an excellent opportunity to discuss and harmonise our efforts for a stable deepening and expansion of the financial market, as one of the core pillars of the economy and the main driver for sustaining development and enhancing the public ’ s welfare. i would like, in my brief address, to bring to your attention some highlights of 2019, regarding the contribution of the banking and financial systems, as well as some milestones for 2020. let me first focus on the overall state of affairs in the albanian economy. the devastating earthquake that hit albania on 26 november 2019 was a major event with a strong impact for 2019, on all the sectors of economy and the whole society. it was an unexpected shock giving rise to economic and psychological consequences in the affected areas and beyond. on the other hand, it was a difficult test, and i may say that all banks passed it successfully, in terms of continuity of financial market ’ s critical functions. in such a disastrous situation, it was very important that people could perceive the security, at least in the financial aspect, regarding their deposits with banks and continuous access to their funds to meet their basic needs. under these circumstances, not only did all banks generously contribute to recovering from earthquake consequences, but they also supported their clients in alleviating their pain and offering adequate solution, while ensuring continued operations and activities. beyond this event, overall, the albanian economy in 2019 performed in positive terms. its growth pace continued to trend upward, employment increased, internal and external balances strengthened, and main indicators of the banking sector ’ s soundness have been improving. all the above reasons boost the optimism on the outlook of economic growth in the medium - term horizon. among others, albania has reached an important milestone on its path to development and integration : the expected opening of accession negotiations with the european union. these negotiations should be definitely considered as an important development anchor and an additional guarantee for both domestic and foreign investors. year 2019, as i stated above, affirmed the stability of the albanian banking system. all structural changes that started

uk and the european union is one of them. the anti - globalist movement and barriers to the free movement of goods, people and capital appear as harmful to the overall global economy. however, their negative effects fall disproportionally on emerging countries, such as albania, and the western balkans in a broader sense. let me know outline our assessment on the potential negative implications resulting from brexit and the relevant effects on the central banks in the region. 2. potential implications resulting from brexit for albania and the region brexit is certainly a determinant factor for the european union and the euro area. as such, it has left its mark in albania and the region. it may be accompanied by direct or indirect, short - term or long - term negative effects in the labour, goods and services markets. overall, the direct implications for albania and the region are assessed as minor ones, given that 3 / 4 bis central bankers'speeches trade exchange with the united kingdom is low. to illustrate my point, the export of albanian goods to the uk accounts for only 0. 2 % to the total over the past ten years, whereas the share of imports amounted to around 1. 1 %. the stock of british foreign investments in albania shows low rates, whereas the impact of emigration and remittances indicators is somewhat higher, but still a non - determinant factor. on the other hand, indirect effects would depend on brexit ’ s impact on the european economy and banking system. brexit may also translate into institutional developments that will affect the rules of european economic and financial market development, as well as european integration processes. in other words, implications for albania and the region potentially exist, but still remain difficult to identify. i would rather not dwell very long on this topic ; however, i do believe that today ’ s discussions will help us understand these processes and assess in advance the potential political and economic implications and consequences for our countries. i would like to stress that all of us in the western balkans remain hopeful that brexit will not generate centrifugal forces, which harm our european integration processes, initiate setting barriers to free trade and movement of people, and encourage further fragmentation of the european financial system. 3. monetary policy and financial stability in the post - brexit period the coordination of the monetary policy with the necessary measures for safeguarding financial stability remains a challenging issue for policy makers even in better days. the challenges to this