ardian fullani : recent economic and monetary developments in albania speech by mr ardian fullani, governor of the bank of albania, at the press conference on the monetary policy decision of the bank of albania supervisory council, tirana, 30 november 2011. * * * today, on 30 november 2011, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. based on the analysis of albania ’ s latest economic and financial developments and following discussions on the performance outlook, the supervisory council of the bank of albania decided to cut the key interest rate by 0. 25 percentage points. following this decision, the interest rate for one week repurchase agreements fell to 4. 75 %. this key interest rate cut was triggered by contained inflationary pressures along the monetary policy time span and expectations for a more prudent fiscal policy over the period ahead. the supervisory council judged that this decision would provide appropriate monetary conditions to meet the inflation target over the medium run. it would also increase monetary stimulus and promote economic activity in albania. ( let me now proceed with an overview of economic developments and main issues discussed at today ’ s meeting. ) * * * annual inflation rate was 3 % in october, slightly up compared with the previous month ’ s figure. annual consumer price rise continues to be influenced substantially by high food, oil, and primary commodity prices in global markets. these prices have been reflected in a higher contribution of imported inflation to domestic inflation throughout 2011. however, increase in domestic agricultural production, stable performance of exchange rate and price stabilization in global markets have reduced its impact in recent months. these factors, along with the cancelling out of regulated price inflation have led to a continuous slowdown in the inflation rate in recent months. from the macroeconomic aspect, consumer prices were influenced by drivers of a different impact and intensity. the shocks arising from high prices in global markets, the increase in several regulated prices in 2010 and excise taxes in early 2011 were offset on the downside by the below - potential performance of economic activity and sluggish demand pressures. in the presence of anchored inflation expectations and low monetary inflationary pressures, the overall macroeconomic environment has favoured the reduction of inflationary pressures for the second half of the year. in the absence of direct data, the bank of albania ’ s estimates on the country ’ s economic performance, based on indirect qualitative and quantitative indicators, suggest a moderate increase in aggregate demand over the second and third quarters, in line with

ardian fullani : improving the performance of albania ’ s banking sector speech by mr ardian fullani, governor of the bank of albania, at the year - end event with the albanian association of banks, tirana, 17 december 2013. * * * dear bank executives, your excellency ambassador sequi, dear mr. ilahi, dear mr. pencabligil, it is a pleasure for me to participate in this year - end meeting, as we reflect about the challenges we faced and the objectives we accomplished in this year, and endeavour to identify issues that may arise over the next year. given the celebrations time and the spirit of this meeting, i would rather not dwell upon all the issues i would have liked to. however, i will share with you my opinion on two issues i consider as important for a good performance of the banking sector over 2014. before moving on, we should acknowledge that the year we are leaving behind was a difficult one for the banking sector. in its development cycle for over more than one decade, this year, the banking sector ’ s growth slowed down sharply and annual lending levels contracted. deteriorated asset quality, dictated by credit, has led to lower financial profit due to higher provisions needed. these developments have reflected the overall economic slowdown and domestic demand drop resulting from lower private consumption and investments. however, other developments highlighted the banking sector ’ s capacity to properly respond to and cope with these challenges. the banking sector has maintained ample liquidity and capital levels thanks to the further rise in public deposits and added capital by parent banks. in terms of non - performing loans, obvious efforts have been made to restructure credit and sell off non - performing loans to non - bank financial institutions. the albanian association of banks has played an active role in discussing the problems with relevant authorities and identifying solutions through the regulatory treatment of nonperforming loans, notably, the legal amendments to collateral execution process, which entered into force in september 2013. through its activity, the banking industry may transform 2014 into a better year for both the banking industry and the albanian economy. i think that this may be achieved through harder work in the following aspects : the first aspect pertains to restoring lending to adequate levels in albania. this objective may be achieved by interlinking these three elements : a ) cleaning up balance sheets from non - performing loans. it is indispensible that you should mark evident progress during 2014 to write off loss loans from their balance sheets