news. the conclusions of fsap, of this important international passport, are an indication of our earlier conclusions that the albanian financial system is characterized by a supervised and effective banking system and by the other segments that are still in the initial development stages where the core issue remains their regulation and supervision. despite the positive developments there is still much to do. the degree of financial intermediation continues to be relatively low ( about 11 per cent of gdp ). some economy sectors, like agriculture, still continue to be less or not at all credited. the contribution of bank crediting to the production investments is still low and furthermore, considering the high share the credit takes in supporting trade activity, we can come out with the conclusion that the major part of credit is going for the financing of imports. likewise, the degree of using the banking system is not within the required parameters of the time and, furthermore, the degree of cash use continues to be high. in addition, the financial markets continue to remain superficial and subject of speculations. the restricted alternatives of investing free funds are indeed a reason to this situation. the financing of budget deficit continues to be still as the best alternative. however, the banking system should think seriously of enriching the market with other instruments rather than of using at maximum this riskless investment. to be more concrete, i will highlight further on some directions, which, i think, in the medium - term perspective are of priority to further stimulate and activate the bank credit in the economy, as the main instrument through which the banking system promotes the economic development of a market economy. beginning with the bank of albania contribution, it relates first to the duty of meeting the legal obligations to achieve the overall macroeconomic stability with a special emphasis on inflation control. we remain determined in our position that inflation under control is a valuable contribution to achieve the objectives of the country ’ s economic growth, the enhancement of employment and of the living standard in general. on the other side, bank of albania will encourage and support without any hesitation the further development and consolidation of the banking system in particular, and of the financial sector in general. we are deeply committed to undertake the necessary steps to implement all the recommendations given by fsap. for this purpose, we are ready to offer all our human capacities to contribute in this direction. i use this opportunity to appeal on taking immediate actions towards redesigning the licensing and supervisory process of the other parts of the financial sector. bank of albania will continue to pursue

contract enforcement. • second, the improvement of by - laws that regulate the collateral enforcement and write - off of bad debt from banks ’ balance sheets. the definitive solution to this problem would signal to the banking system that albania is a country where lending is safe. all these steps would stimulate the economic activity and restore economic equilibrium. however, the albanian economy is also suffering from structural weaknesses, which restrict the growth rate. i would not like to examine this aspect in detail but i think it's reasonable to reiterate my message that albania should speed up structural reform. it should be anchored to the eu convergence process and aim at adopting its best models and rules. through public investment and economic incentives, it should aim at a more effective and competitive economic structure, capable of generating a rapid and sustainable growth. bis central bankers ’ speeches