ardian fullani : monetary policy challenges in the framework of approximating the bank of albania to the european central bank greeting speech by mr ardian fullani, governor of the bank of albania, at the workshop organised by the bank of albania in cooperation with the gtz, tirana, 8 december 2004. * * * honorable participants, i would like to express my pleasure for participating in this meeting, whose topic has been of great interest to me, and not accidentally i expressed in my first public pronouncement the approximation of the bank of albania to escb pattern as one of my essential challenges. i had the possibility to discuss this issue even with the vice president of the ecb, mr. papademos, at a meeting in frankfurt, where i launched the idea to be assisted by the ecb and member banks of the escb on approximating our system with the european one. trying to spare the time for other discussions of interest in this meeting, i would like to briefly mention some of the main steps to be undertaken by the boa in the integration process with the european system of central banks, a process that requires not only time, but also dedication, lobbying, financial resources and above all, capable human resources. 1. reviewing the legal and regulatory framework of the bank of albania and of the financial system in albania in integration process, the reviewing of laws and by - laws is of priority, particularly in the context of the prerequisites that a country aspiring for membership has to meet in the central banks area, in financial and banking system and even broader. in spite of the so - far achievements, much work has to be done. therefore, the identification of our needs and priorities in this direction would serve as the first step. the bank of albania is not the sole authority in supervising the financial operations licensed in albania. in this sense, the reviewing of laws and bylaws, involving not only the banking system but also the financial one, would open the way to more effective supervision of the overall financial system. this process would serve not only to further develop the financial system but also to assist in increasing the institutional cooperation between the banking and financial system, thus leading the cooperation between these systems to a higher level. 2. reviewing the organizational and institutional system it is natural that the pattern to be pursued is that of the ecb and escb. in this issue, much importance will be given to the institutional development of the bank of albania over the mid - term

action plan of the bank of albania is a broad and complex process, which consists in legal and institutional regulations and decisions. i am happy to see that the ebrd has reached the conclusion that this legal, regulatory and institutional process will contribute to reducing the nonperforming loans, in the long term. it is also encouraging to note that the report makes a similar positive assessment for a group of reforms undertaken by the albanian government and other authorities in the area of market liberalisation, privatisations, energy sector and infrastructure. 1 / 2 bis central bankers'speeches looking ahead, the report assesses objectively the global macroeconomic environment as overall favourable. the nature and origin of capital flows toward the transition economies is immune from the adverse effects from the brexit or increase in interest rates in the us economy. for the central and southeastern europe, during 2017, the economy is expected to grow faster, driven by domestic factors and a slight and stable improvement of the economic situation in foreign trading partners. the main risks relate to the performance of commodity prices, and in particular to geopolitical and global economic developments. the deepening social inequality is an issue of particular concern that has been present across the board in transition countries. the report evidences that inequality in the economy, in terms of opportunities and financial inclusion, has been expanding, contributing negatively to economic welfare in transition countries. finding solutions is a difficult challenge, with financial education and financial inclusion considered as tools for addressing this issue successfully. i would like to take advantage of this opportunity to emphasise that the bank of albania and the banking system are paying particular attention to these two topics. our financial education programmes, informative publications on banking products and services, coupled with regulation, licencing, introduction and support for new payment and financial services technology and instruments, are aimed at enhancing financial inclusion and generating opportunities for financial access for all groups of the society. the bank of albania deems that more may be done with regard to designing and promoting financial products that satisfy better the needs of such groups. in addition, we think that there is more space for faster growth of credit to the private sector, particularly for certain sectors, in which inequality is more notable. more concretely, agriculture is a good example to illustrate this point. while it contributes a significant share to the gross national product, it only gets a small share of credit and other financial products. beyond these policies and strategies for developing financial products, the real fight against poverty and inequality