of albania finds that the fiscal policy has been on a consolidation path during in 2016, reflected in the reduction of the public deficit and public debt. although it has injected a weak stimulus to the economy, the consolidating fiscal policy has facilitated the accommodative monetary policy pass through, by reducing the risk premia in the economy, favouring the reduction of financing costs, and increasing the space for lending to the private sector. according to reports from the ministry of finance, for the first time after six years, the public debt was reduced from 72. 7 % of the gdp in 2015, to 71 % in 2016. the bank of albania has been and is certain in the position that efforts for reducing public debt should continue. the functioning of the monetary policy pass through mechanism, and factors contributing to or preventing it, are an integral part of the work of the bank of albania. research efforts in 2016 aimed to assess the ability of the tools used for generating economic projections at the bank, as well as the understanding of the functioning of monetary transmission vis - a - vis the current challenges in the financial system. in this context, i would like to point out that the bank of albania has identified two main obstacles in the monetary policy pass through mechanism, whose solution requires broader - scale cooperation. the first obstacle relates to the high level of non - performing loans. to reduce this risk, a national action plan for reducing non - performing loans has been drafted, and is currently underway. the second obstacle relates to the high level of euroisation in the economy, which creates potential risks in the financial system and renders the monetary policy pass through more difficult. preparing a plan for reducing euroisation in our economy is a joint commitment by a number of authorities and the bank of albania is in the process of identifying measures that may be taken in this regard. amid a complex and challenging economic and financial environment, the coordination of the monetary, micro and macro - prudential policies assumes primary importance in promoting monetary and financial stability. in 2016, the bank of albania has worked with the same intensity in all three aspects, aiming at an optimum calibration for them. following, is an overview of our work for maintaining and promoting financial stability. 3. promoting financial stability and sound lending in accordance with its mandate and institutional responsibilities, the bank of albania is jointly responsible for safeguarding financial stability in albania. it communicates its assessment on the financial stability regularly, and coordinates its policies with other institutions

addressing the challenges we have faced. the positive results of our work show that we are on the right direction. nevertheless, i think that for successful institutions there is always something more to do. they are guided by the medium and long - term objectives ; they invest to enhance the professional standards and increase their capacities though the preparation, strengthening of independence, accountability, transparency and good governance. this credo of ours will be a guide for our action plans in the future. thank you for your attention! 1 this memorandum was signed by the bank of albania, ministry of finance, ministry of economic development, tourism, trade and entrepreneurship and the albanian association of banks. 8 / 8 bis central bankers'speeches