who are ready to share their expertise on the factors that generate food insecurity in the extended black sea region in the context of the 21st century challenges. mr. vasile iuga, partner at pricewaterhousecoopers will chair the round table on energy security and together with prominent experts will focus on long term development of energy networks in central and eastern europe. ladies and gentlemen, now, a few words about the topic of this conference. bis central bankers ’ speeches we all agree that the black sea region is increasingly becoming a priority on the international agenda. in fact, a regional approach is emerging as actors completely understand that common problems need to be addressed jointly. over the past five years the region and the world have faced many troubled moments ; fast changes have influenced the way peoples choose to look to the future. the idea of strengthening cooperation in the black sea region is not new. it sprang from a paradox : although the countries in the area shared geographical proximity, they came from different historical and political backgrounds and, as a consequence, had poor or quasiinexistent economic relations. as a veteran in this field, i can give you a simple example : in the ‘ 90s, to reach either baku or tbilisi one had to fly through vienna. in effect, in the autumn of 1997, the governor of the central bank of turkey contacted me and suggested the founding of a governors'club of central asia and black sea region, with the bank for international settlements serving as a model. it was officially instituted on may 1st, 1998, in istanbul, when nine countries signed the founding protocol. during the following years, thirteen more countries gradually joined our club, now spreading from the baltic sea to the pacific ocean, from central asia to the centre of europe. regional cooperation in different fields like food and energy security – focal points of today ’ s conference – might be initiated at a high political level, but its implementation requires an active, broader and more informed participation of private sector and civil society, as the main vehicles of cross - border cooperation. the expansion of each one ’ s participation has a double effect ; it allows for more informed regional policies and faster project implementation, on one hand, and it cultivates an understanding that regional cooperation has a direct impact on everyday life and individual citizens ’ welfare on the other hand. the romans used to say “ mens sana in corpore sano ”. the way i see it, it greatly matters what you fuel your body with. greater

international commodity prices, other supply side factors, but also from a strong domestic demand. yet, some of it is structural, as any catching - up process is inflationary in nature. higher wage growth pressure is normal, up to a point, in view of large wage differentials, migration flows, and labor market tightening. despite the wage growth, cee countries are becoming increasingly competitive, as productivity also grows. this is why the current account position of non - euro member states is better now than before the crisis. the monetary policy normalization cycle runs also at a different pace. even within cee countries, while the monetary stance remains largely accommodative, the situation is quite heterogeneous regarding inflationary expectations, policy objectives, and policy tools used. as regards romania, we started the tightening of monetary policy by hiking the rate twice this year, after further narrowing the corridor around the policy rate last year, but a gradual approach is warranted by the need to avoid sharp currency appreciation in the regional context. in our case, the policy normalization has been supported by two favorable developments in the banking sector. first, the npls ratio dropped from 22 % at end - 2013 to 6. 4 % at end - 2017, making it the largest adjustment in europe over a relatively short time period. at the core of this adjustment were conservative requirements for provisioning npls, our hands - on supervision approach, and a fiscal facility that was conducive to the development of the secondary market for npls. second, the share of local currency denominated loans in the total stock of loans has increased from one third prior to the crisis to two thirds nowadays. this reduced the contagion risk and improved the transmission mechanism of the monetary policy. a somewhat higher inflation and an earlier start in the policy normalization cycle have to be considered in view of another challenge, which is the lower level of financial intermediation. some countries are facing the dilemma recently portrayed in a bruegel institute paper, between raising inflation and decreasing appetite for risk, the latter being reflected in the lower levels of credit to gdp. the solutions adopted are diverse. while some central banks are embracing a higher inflation, and try to stimulate financial intermediation, others try to reign in inflationary expectations and have already started the tightening cycle. nevertheless, the issue of financial intermediation remains important, as credit for the corporate sector would need to replace direct fiscal incentives in most of these economies