that of drafting a regulatory framework that disciplines banks, establishing equal rules of the game for all actors in the market. the challenge for the bank of albania is to ensure the soundness and stability of the financial system, but without sacrificing its competitiveness and efficiency. only in this way, the financial system can be able to support households, businesses and other users of financial services, as well as protect depositors. 1 / 3 bis - central bankers'speeches however, the implementation of competition policy in the banking sector remains a complicated issue. regulation in financial sector, unlike other sectors of the economy, where competition and market discipline are sufficient to achieve the desired results, is needed for the well - functioning of this sector. in addition, there are significant asymmetries regarding the information on risk levels between customers and banks. this is also related to the lack of knowledge and understanding of financial concepts that reduces confidence in their ability to choose the right financial products. therefore, for the purpose of establishing the most competitive conditions in the market, the bank of albania has undertaken a number of measures, such as : ( i ) financial education of public related to financial alternatives ; ( ii ) transparency on prices which enable the comparison of banks'offers for loans and deposits ; and ( iii ) credit registry for sharing reliable and up - to - date information on borrowers'quality amid banks. prudential regulation is quite indispensable for the well - functioning of the market. in this regard, the fruitful collaboration between the bank of albania and the competition authority has been playing an important role. licensing for the conduction of banking activity is the first point where prudential regulation and competition policy meet. this instrument regulates access to the banking market and requires the applicant to prove how it will contribute to the existing environment, without infringing the conditions of free competition in the market. on the other hand, effective competition can lead to the reorganization of the banking market. competition is a selection. weaker banks give way to stronger and more efficient banks. in turn, the entire banking system becomes stronger. in the last 10 years, the banking sector experienced a fast consolidation. as a result, the number of banks declined to 11 from 16. medium - sized banks have absorbed small banks, thereby increasing their market share and reducing the banking sector's reliance on larger banks. nowadays, banks participating in the consolidation process are the most active in the market. consolidation, also has provided a very positive

completing other reforms that would allow for institutional building capacities, which on the other hand, would make these changes root deeper in our societies. today, our countries enjoy stable macroeconomic environments. we are experiencing low inflation levels, stable exchange rates, a more prudent and responsible fiscal policy associated with limited and manageable budget deficits. national central banks have established their independence and are perceived in public as respectable and reliable authorities. there are also common efforts to fully open our economies and to attract foreign capital. as we are in the process of fully opening our markets, we are benefiting from increased competition, improved productivity and efficiency, and increasing quality of services for our citizens. but, we are also facing several uncertainties and risks. markets remain segmented and their infrastructure faces difficulties in supporting new and imposed developments. market infrastructure deficiencies exacerbate their shallowness and make it difficult for various market participants to act in order to meet their business objectives and manage their risks. the technological improvements have to fully show their effect in meaningfully reducing costs of financial services. regulatory gaps in different areas of local financial markets create the conditions for regulatory arbitrage and may adversely affect the supervisory work. therefore, erroneous and costly decisions are unavoidable. the financial situation of single market participants, due to market segmentation, is highly affected by their capacity to find financial support in the international financial markets. in reality, this leads to an increasing gap among so called “ big ” and “ small ” or among foreign and locally owned financial institutions. real economy development is an additional source of risk for financial markets. such interaction should be carefully watched to better understand financial market trend in the future and identify financial imbalances in a country and regional level. indeed, we are all experiencing a construction “ boom ”, where residential house prices have increased considerably. in some countries this is fuelled by credit expansion but in the whole region there different views whether this is affordable. at the same time, the pace of general credit expansion, particularly for consumption and in foreign currency is alarming and is forcing us to think of several “ what if ” scenarios and take preventive actions. it is our task as monetary and supervisory authorities, to provide a proper environment for a balanced and stable development of our financial markets. this is not an easy task for us, especially when there is no simple indicator to measure our success in achieving financial stability, and when we realize that this is a multifaceted issue