##ly regulatory requirements with internal risk measurement methodologies. it is important to recognize that the application of the new accord is principally intended for large international banks, which are complex institutions usually operating in developed countries. therefore, basel ii has often been questioned about its implications and appropriateness for banking in emerging market economies, and it is on this point that i would like to focus my remarks. in principle, the three - pillar structure of the new accord provides more precise directions to regulators to strengthen bank supervision and incentives to banks to become more sophisticated in risk management. implementation of basel ii eliminates “ one size fits all ” methodology to assess risks and offers instead a wide range of methods to evaluate risks based more on failure likelihood. but the supervisory authorities in several emerging markets and many developing economies are concerned that basel ii puts a challenge they cannot meet. probably our greatest concern relates to the need of the standardized approach to rely on external rating agencies for calculating minimum capital requirements. currently domestic rating agencies are totally absent in albania and not well developed as in many other non - oecd countries. on the other hand, in most of our economies many small enterprises cannot afford to be clients of international rating agencies. since borrowers unrated from rating agencies will be assigned a 100 % risk according to basel ii, initially most domestic credits may end up under this 100 % category. this could reduce risk sensitivity of the new system brining it close or similar to that of basel i. on the other hand, albanian banks hold a significant share of government treasury bills and notes. actually, under basel i to this exposure of the banking system denominated in local currency is assigned 0 % risk independently whether credit risk of the sovereign debt is rated or not. under basel ii, standardized approach, it is possible that sovereign debt is assigned a risk weight between 0 % to 150 %, most likely 100 % since it falls under unrated category. this means that banking system in albania may have to increase capital allocation to comply with the minimum level of the capital adequacy ratio. an important intention of basel ii is to strengthen market discipline by developing a set of information disclosure requirements. in our countries there is plenty of room for improvement in this respect to allow market participants to assess key information on risk exposure, risk assessment process, and hence capital adequacy. this is important since it increases public pressure on banks to have a better performance in assessing and monitoring risk. however, in short run information disclosure might also have some

##k and 10000 lek. the latter is a completely new denomination in the series of the albanian banknotes. the printing and issue into circulation for the first time of the new banknote with the largest value, 10000 leke, represents in itself, the adoption of the banknotes ’ structure to the evolution of the structure of prices and wages, the development the electronic payments, and of the other indicators related to the management of currency. this note with the largest denomination accompanies the economic development of the country, and according to all analysis, meets the market requirements to have it in the structure of our series of banknotes, which are legal tender. the presentation and issue of this note will enable a better and more efficient circulation of cash, by helping the structure of the currency in circulation, reducing the costs of production, storage and distribution, thus enhancing the efficiency of the bank of albania in cash management and issuance. in addition, the presence of this new highest - value banknote in the structure of the albanian banknotes increases also the effectiveness of the bank of albania to manage a rather adequate strategic stock to meet the 1 / 3 bis central bankers'speeches increased market demand for cash in contingency cases. despite the development in other means of payments, as electronic ones, currency in circulation is set on an upward trend from years now. this trend reflects the ongoing demand of economy for cash as a payment means. bank of albania is attentive while planning to guarantee the fulfilment of this demand of the market, in both normal and atypical situations. the current situation caused by the covid - 19 pandemic, is a real example in this regard. economy has increased further its demand for cash throughout this period. thus, over 2020, currency in circulation lifted by all 52 billion or three times higher than the growth recorded in 2019. also, in the first five months of 2021, the growth amounted around all 10 billion. meeting the demand of market for cash is achieved through ensuring and planning the sufficient stock of cash at the bank of albania, which guarantees the security for both the present and future. allow me to detail briefly some of the features of these two denominations : the 1000 lek banknote, part of the new series, has a refreshed design, but it retains the same motives presented in the existing one, embedding changes related to the whole configuration of all added and improved elements. the theme of the 10000 lek