work becomes more efficient if supported by information technology, at the scale that is sufficient for the size and the complexity of the bank business. from a practical point of view, in those financial systems where the size of certain financial institutions is of a systemic importance, the development of a risk management program is paramount. besides the bank management, whose responsibility, i repeat, is of primary nature, the supervisory authority has a clear interest and responsibility in making sure that individual banks ( and other financial institutions ) understand what they are doing. this interest stems not only from their legal obligation, but also is an instrument in ensuring the public that the financial institutions are managed in a sound and safe manner. in the end, all this gives a remarkable contribution toward the goal of reaching and maintaining financial stability. history and practice have shown that having a good supervision function is very important, but not enough. it is the market that could very well and in a timely way, discover behaviours that indicate imprudent risk taking by financial institutions. in a market that functions under normal conditions, competitive factors force its players to look at each other to identify what can be done better. this is much stronger if complemented by greater transparency and accountability. under a deep and developed market, the work of the supervisors, from the viewpoint of identifying in time imprudent risks that financial institutions are taking, becomes easier. on the other hand, open and developed markets, usually mean more complex products with more complex risk features that require more complex systems to support and monitor them. this requires greater and more skilful supervision. while the market well - functioning and transparency, are elements that help supervision, these elements do not substitute it. firstly, while developed markets mean more capacities to analyse past and future events, the risk is that they still may miss the global picture, as individual institutions do not have the data and most of the times, the need, to analyse the financial stability of the system as a whole. secondly, what individual financial institutions analyse and expect from the future developments, is frequently what they want. one should also remember that financial institutions of a certain important size that expect similar events, have the power to move the market in one direction. based on specific elements of any national or regional market, this does not necessarily show a reduction in the level of risk. moreover, the systemic risk in this case, is still very high. it is then important to provide the supervisor with the necessary analytic tools, to use

ardian fullani : monitoring of the economy to be conducted not only in the metropolis but in the regions as well article from mr ardian fullani, governor of the bank of albania, published in the ekonomia newspaper, 21 january 2005. * * * our economy has long ago been integrated in a continuous process of quality and quantity development, including an increasingly wider geographical expansion. both communities, bank and business, need to cooperate more closely with each other. in order that this cooperation becomes more efficient, we deem, as bank of albania, to play our active role not only through establishing a safe macroeconomic environment, but also by providing a range of other operations that will encourage lending activity of the banking system from one side and impact a more correct tendency of business toward more reliable projects and investments, on the other side. to this end, we estimate in our short - term and medium - term programs to give our regional branches spread throughout the country a different role from the one they played till now. we deem appropriate it ’ s time now for our branches not to be simply cash storerooms and distributors. also, we shall try to renounce some operations of non - central banking nature, which gradually shall be absorbed by commercial banks. our goal is these branches be changed into an advanced model of the bank of albania presence throughout various regions of the country. they will become genuine stations of information gathering about the economic and financial activity of the region, being preceded by further analyses and studies. this research work will serve not only to a more explicit monetary programming but also to the modernization of transmission elements of this policy from the higher authority to the lower authority and vice versa. i estimate that this initiative of the bank of albania to monitor the economic activity not only in the metropolis but also in other regions of the country would be of particular interest for all the interested groups. further, i would like to add some other comments on the latest developments of the banking system, which i deem have created good premises for a real expansion of this business, an expansion that will positively impact on the performance of business activities. after completion of the real time gross settlement ( rtgs ) system, the bank of albania inaugurated some times ago the initiation of a very important project on the automated electronic clearing house ( aech ). the operation of this new system will considerably increase the payment speed for the customers, knowing that the lack of this element has maintained businesses far from banks. i take this opportunity to make