remains the primary risk to our banking sector. in response, the banking sector has established adequate reserve funds to buffer major shocks on the borrowers repayment capacity and market equilibrium. stress tests support our conclusion on banking system resilience. the presence in this room of both the business community and the banking system suggests me to refer once again to the need for sincere cooperation of mutual benefit. with a few exceptions, i think this cooperation has been present and operational and has certainly supported in particular the country ’ s economic activity over the past years. the global financial crisis that erupted in late 2008 had its influence on our economy by stiffening this cooperation. on the one hand, the system found itself in a difficult liquidity situation, while on the other hand businesses found it difficult to access markets. with some additional subjective reasons, the outcome of this was a deterioration of the system ’ s loan portfolio and companies ’ liquidating capacity. consequently, 2009 – 2010 marked a slowdown of lending growth to the economy, reflecting the increased prudence, fully justified by the system, and bis central bankers ’ speeches business inability to earn a meritable new loan. the period coincided with a review of balances and portfolio restructuring, when possible with provisions, directly affecting the system ’ s financial performance. the bank of albania has played a major role as a guardian of the country ’ s macroeconomic and financial stability. macroprudence has been the prevalent word in our communication with the market, authorities and the public. we have translated macroprudence as a need for more capital and liquidity, and increased banking system payment capacity. consequently, the albanian banking sector did not experience contracting. the bank of albania has provided and continues to provide the necessary liquidity to the banking system, to stimulate not only to the market but also to the entire economy. prudent policies and timely legal regulations guaranteed effective banking supervision and enabled satisfactory businesses ’ access to bank loans. actually, i would like to point out that the albanian banking system left the crisis in healthy condition and that it guarantees growing stability. our banking system, during this period, has carried out a considerable amount of work, which has served to consolidate each bank ’ s position prior, during and after the crisis. hence, the banks are now able to use again their full lending potential. for the truth ’ s sake, it must be underlined that the latest figures speak of growth in the order of 10 per cent in annual terms, a figure which should not go

much of a surprise to you. and yes, monetary policy today is still regulatory policy in action, in my opinion. you see, the chief task of monetary policy in the euro area is to preserve price stability. this makes it part of the overall regulatory structure, in which it plays a crucial role. echoing walter eucken ’ s words, otmar issing remarked that the primacy of monetary policy had been reconfirmed by the establishment of european monetary union. that said, walter eucken was not thinking of a central bank to safeguard price stability. in his opinion, a good monetary constitution should, like the competitive order, function as automatically as possible. this is because eucken warned of weaknesses in central bankers and their influence. i quote : “ … experience shows that a monetary constitution which gives those in charge of monetary policy a free hand places greater confidence in them than it is advisably possible to do. ignorance, weakness with regard to interest groups and public opinion, incorrect theories, all these things influence those responsible for monetary policy, to the great detriment of the task they have been assigned. ” as otmar issing admitted, walter eucken is not a name that springs immediately to mind when searching for the intellectual antecedents of the euro. [ 7 ] what is noticeable instead is eucken ’ s general scepticism towards central and uncontrolled monetary policy institutions. today ’ s advocates of regulatory policy see central bank independence in a more positive light. it is precisely this, together with a narrow mandate, which shields monetary policymakers against being co - opted for political purposes and is the sine qua non for striving for price stability without compromise. last year saw the ecb ( european central bank ) governing council complete the review of its monetary policy strategy, a key component of which was to recalibrate the manner in which the governing council intends to preserve price stability in the euro area. [ 8 ] the eurosystem is now aiming for an inflation target of 2 % in the medium term. the target is symmetrical, meaning that positive and negative deviations of inflation from the 2 % target are equally undesirable. by setting this target above zero, monetary policy has a greater safety margin against deflationary risks. the medium - term orientation accounts for the fact that short - term fluctuations in inflation can balance out over time and that monetary policy measures will only fully feed through into prices with something of a lag.