ardian fullani : post - crisis challenges for southeast europe speech by mr ardian fullani, governor of the bank of albania, at the annual meeting of the european fund for southeast europe, tirana, 8 june 2011. * * * honourable mr. prime minister, ladies and gentlemen, it is a great pleasure and privilege for me to be here today, in this distinguished panel, to greet the start of the 2011 annual meeting of the european fund for southeast europe, or efse as we are used to call it. more than four years ago, i was invited to the launching ceremony of this wonderful incentive here in tirana. two years ago, at its annual meeting that took place in novi sad, the albanian government became a shareholder to the fund. today, we are gathered here again, in the capital city of albania, to make the balance of this institution ’ s work. i avail myself of the opportunity to thank the european fund for southeast europe, for its contribution to our region, for its financial support and expertise provided for the financial market development, without leaving behind specifically the efse ’ s assistance to albania through funding business projects at competitive terms, at a time when bank lending has posted slow paces of recovery. the grave financial crisis of modern times has induced much volatility in the global economy. today, the situation is assessed as more improved. in theoretical and scientific debate round - tables, efforts have been focused on identifying causes and taking measures to prevent recurrence of such events in the future. a new financial infrastructure is being designed. this is the context of this annual meeting, on whose focus is the identification of post - crisis challenges our region is faced with. allow me to briefly address two or three of my personal opinions about this situation. before the impact of international financial crisis, all countries in the region were involved in important reforms aimed at increasing the economic growth. at this stage, through necessary legal improvements and prudent development policies, there took place the opening of economies and the development of trade, increase in domestic and foreign investments, overall liberalization of markets and promotion of financial market development, to provide more qualitative and sustainable financial services to businesses and households. from the macroeconomic viewpoint, fiscal policies in the region are aimed at fiscal consolidation through revenue growth and greater investment - oriented public spending. monetary policies, thanks to different exchange rate regimes, have generally kept consumer price rise on track and interest rates have followed a downward trend. however, the

the opinion that each foreign investment means faster convergence to europe. third, the financial market should develop to create other alternatives for savings, financing and risk management of economic entities, as well as for improving the conditions of these activities. besides the banking sector, the share of non - bank financial institutions should also be rapidly developed, to enable a greater involvement and access to financial services for entities that can not benefit enough from banking services. furthermore, i think that it is important to pay more attention to development of capital markets, particularly those issuing and trading debt securities and equities by private entities. fourth, the regulatory framework and supervisory practices should be completed with some important elements in terms of prudential measures and emergency financial situation management. the prudential measures framework should cautiously treat capital and liquidity requests from banks, especially in the case of foreign currency. simultaneously, it is necessary to assess the systemic risk in both, the financial system and the banking one, by constructing special indices and implementing best practices in stress - testing. in terms of completing the framework on management of emergency financial situations, importance should be given to the legal and regulatory reviewing and improvement process, the cooperation between public authorities and timely identification of various problems, particularly in systemically important institutions. the bank of albania has already entered in this reviewing and improvement process of the regulatory framework, on the basis of several pre - set objectives. concluding, i would like to emphasize that the countries in our region have successfully overcome a difficult period as a consequence of the international financial crisis. however, there are numerous challenges ahead. they require an ongoing commitment of all the factors of the country ’ s economic and political life. the need for coordinating the actions both locally and regionally is an absolute priority. i think there are in place all the prerogatives for making this cooperation effective, honest and of mutual benefits to each country in the region. to this end, i think that the european fund for southeast europe will continue to play an important role, which once again i take this opportunity to congratulate for the work it has done and the commitments it has taken for the future. thank you! bis central bankers ’ speeches