the first and second quarters of 2011 relied mostly on the industry and services sectors growth. owing to foreign demand, industrial output increased by 12. 3 % in annual terms, providing major contribution to the expansion of the economy in the first quarter. the services sector, topped by “ trade, hotels and restaurants ”, continued to support economic growth, although less than last year ’ s quarters. this sector ’ s annual growth marked 1. 8 % in the first quarter of 2011. the services sector performance is closely connected to consumer spending performance, which i will address later. after five quarters of contraction, the construction sector posted annual growth of 4. 6 %, triggered by higher public investments during this period. lastly, agriculture maintained growth and contribution rates similar to the last quarter of 2010. indirect data obtained from business surveys and monetary indicators suggest that this performance is and will continue to be along the same lines even during the second quarter and beyond. on the demand side, economic activity relied mostly on foreign demand and public spending, while private sector contribution was low. indirect data support the assessment for a weak private consumption performance during 2011 h1. in spite of increased available income and improved bank lending – as indicated by higher employment, real wage and consumer and house - purchase loans – consumer confidence was low. the albanian consumer continues to be cautious in spending, displaying added saving preference over a number of quarters. naturally, this behaviour is a structural correction of the consumption model shown over the past years, but the slow performance of consumer spending reflects, also, added uncertainty about the future. while the first component is welcomed, in the context of preserving macro - and micro balances, the second component may and should be corrected : households consumption has the potential to grow and be stimulated in the short and medium run. taking into account the significant impact of consumption on the gdp, its performance will substantially condition economic growth during this time span. bis central bankers ’ speeches private investments increased at moderate pace during 2011 h1 as illustrated by higher loans for investment and imports of capital goods. although financial terms – availability, liquidity and bank interest rates – are significantly improved, the existence of spare capacities in the economy limits the demand of businesses for investment. in the short run, the position of economic activity operating below its potential conditions a slow performance of investments. in the medium run, investments performance will reflect developments in internal and foreign demand performance. given the need for a more competitive albanian economy and its further orientation towards exports, stimulation of investment

prices declined and investors experienced losses as the value of the underlying assets declined. this did not lead to stability issues in the broader system, although the freezes did cause hardship for some individual investors. so our own experience is that these types of disruptions in the asset management industry can be managed. however, the degree to which this lesson can be applied more broadly remains to be seen. globally, there is considerable effort being devoted to understanding the nature of the risks in this area, including whether these risks are any different to those that would arise if investment portfolios were managed directly by the individual investors themselves, without the input of an asset manager. a related stream of work – which in some way parallels similar work for the banking industry – is to examine what role regulation should play in addressing the various risks and what role the central bank should play. relevant issues here include : how prescriptive any liquidity regulations should be ; what are the merits of alternatives to fund freezes, such as exit fees and liquidity gates ; and what, if any, role should the central bank play when markets freeze and normally liquid assets cannot be traded. these are all difficult issues to deal with and perspectives range widely. i am sure that they will keep many of us busy over the years ahead. on that note, i would like to thank you for listening and i would be happy to answer any questions. bis central bankers ’ speeches references apra ( australian prudential regulation authority ) ( 2013 ) “ implementing basel iii liquidity reforms in australia ”, apra discussion paper, may. available at http : / / www. apra. gov. au / adi / prudentialframework / pages / implementing - basel - iii - liquidityreforms - in - australia - may - 2013. aspx. apra ( 2014 ), “ apra finalises implementation of liquidity coverage ratio in australia ”, media release no 14. 22, november. available at http : / / www. apra. gov. au / mediareleases / pages / 14 _ 22. aspx. cheshire j ( 2015 ), “ market making in bond markets ”, rba bulletin, march, pp 63 – 73. cusbert t and rohling t ( 2013 ), “ currency demand during the global financial crisis : evidence from australia ”, rba research discussion paper no 2013 – 01. debelle g ( 2014 ), “ liquidity ”, speech at