sensitive issue that was addressed over the past year and will constitute a priority in the upcoming period. the bank of albania, through its analyses, played a key role in discussions about this matter, aiming to tackle it timely and duly. also, issues related to anti - money laundering, transparency and compliance with prudential regulations were an important part of the supervisory process in 2010. in view of strengthening the supervisory process on banking institutions, the bank of albania has signed a number of cooperation agreements with central banks in the region and with european ones, where parent banks have their headquarters. strengthening the supervisory regulatory framework in 2010, the bank of albania finalised drafting of several new regulations and amended some other regulations on banking supervision. this process aimed at compliance with basel committee standards and eu directives, taking into account international best practices and albanian banking system developments. new regulatory acts and key amendments to actual acts on banking supervision approved during 2010 are : regulation “ on management of risk from open foreign exchange positions ” ; regulation “ on risk management in the activity of non - bank institutions ” ; guideline “ on conservatorship and liquidation of banks ”. * * * besides the main aspects of the bank of albania ’ s work, such as monetary policy and banking supervision and regulation, the bank of albania ’ s activity was also focused on fulfilment of its other legal obligations and institutional commitments. sparing the details, i would like to emphasize that the bank of albania has done a great job in 2010 for : developing and sophisticating the payment system ; supporting the integration processes of the country, in accordance with our scope of activity ; enhancing our communication with the public, as an essential instrument to foster transparency and central bank independence ; further developing the monetary statistics and those of the external sector of the economy ; strengthening research capacity, in support of analysis and decision - making. all these activities serve the financial system development and support the free market economy in albania. a detailed analysis on them can be found in our annual report * * * dear madam speaker, dear members of parliament, turning back to our analysis on economic and financial developments in the country, during and after the crisis, i would like to highlight a structural weakness of the albanian economy bis central bankers ’ speeches that has accompanied it throughout the transition : high current account deficit and still low degree of our economy ’ s competitiveness in global markets. today we live in a global world, with integrated capital, product and labour markets. as a

, can maintain it for much longer. in most of europe today, further stimulus is no longer an option, with the bond markets demanding the contrary. k. rogoff, “ inflation is now the lesser evil, ” project syndicate, december 2008. see j. hatzius, z. pandl, a. phillips, and s. j. stehn, a. tilton, s. wu, and m. acosta - cruz, “ the case for a nominal gdp level target, ” us economics analyst, no : 11 / 41 ; goldman sachs global ecs research, 2011 ; and c. romer, “ dear ben : it ’ s time for your volcker moment, ” new york times, 29 october 2011. indeed, if inflation is both higher and more uncertain, a higher inflation risk premium might result, prompting an increase in real interest rates that would exacerbate unfavourable debt dynamics. bis central bankers ’ speeches there are no effective mechanisms that can produce the needed adjustment in the short term. devaluation is impossible within the single - currency area ; fiscal transfers and labour mobility are currently insufficient ; and structural reforms will take time. actions by central banks, the international monetary fund and the european financial stability facility can only create time for adjustment. they are not substitutes for it. to repay the creditors in the core, the debtors of the periphery must regain competitiveness. this will not be easy. most members of the euro area cannot depreciate against their major trading partners since they are also part of the euro. large shifts in relative inflation rates between debtor and creditor countries could result in real exchange rate depreciations between euro - area countries. however, it is not clear that ongoing deflation in the periphery and higher inflation in the core would prove any more tolerable than it did between the united kingdom and the united states under the postwar gold standard of the 1920s and 1930s. the route to restoring competitiveness is through fiscal and structural reforms. these real adjustments are the responsibility of citizens, firms and governments within the affected countries, not central banks. a sustained process of relative wage adjustment will be necessary, implying large declines in living standards for a period in up to one - third of the euro area. we welcome the measures announced last week by european authorities, which go some way to addressing these issues. with deleveraging economies under pressure, global growth will require global rebalancing. creditor