gent sejko : monetary policy of the countries of the region between us federal reserves and european central bank speech by mr gent sejko, governor of the bank of albania, at the becici summit of the countries of the region on " regional financial stability in a new global environment ", becici, montenegro, 16 june 2017. * * * dear mr. chairman, dear colleagues, i would like to start by thanking the organizers for this invitation. as usual, i find it highly useful to share, among colleagues, opinions on common challenges. the title of the panel suggests our monetary policy stances are somehow shaped by the ecb and the fed monetary policy paths. though far from being the full picture, this is true, at some extent. the monetary policies of both these central banks are highly relevant to us. they affect external conditions and they could dictate the directions, the speed and the price of financial flows. furthermore, for countries with a dollarized or euroized financial system, they might also affect domestic credit, financial conditions, balance sheets, as well as exchange rates. so, this brings us to the following questions. where does our monetary policy sit at the current situation? what challenges do we face? and, how do we respond to the shifting of these external monetary policies? i am quite confident these issues will be broadly covered during this event. now let me make a few remarks, regarding the monetary policy of the bank of albania vis - a - vis that of the ecb or the fed. the boa has pursued an expansionary monetary policy, which has been both supported and facilitated by the monetary policy stance of the ecb. during the past four years, the bank of albania has been engaged in an extensive course of monetary accommodation. in the presence of weak cyclical developments and low inflationary pressures, we have decreased our policy rate to a historical minimum of 1. 25 %. furthermore : we have increased our liquidity injections in the banking system ; we have adopted negative rates for required reserves in euro, in line with the policy of negative deposit interest rates in the euro area ; we have been engaged in a clear and transparent forward guidance, announcing our preference for accommodative policy in line with our inflation target ; however, unlike the fed and the ecb, and similarly to other central banks in the region, we have not activated unconventional monetary policy tools. this is because the monetary policy accommodation pursued by the

is, the positive effects of transparency may not be fully benefited if this information is not interpreted fairly by economic agents. this is particularly necessary for countries of a short history of market economy, where the degree of public involvement in the country ’ s economic life is still low. therefore, the bank of albania has been very aggressive in terms of designing and developing various programs for public education. numerous meetings with market participants, with financial and banking community, with the business, with the academy, with the media and beyond, with the public, have been regularly carried out and i assure you that they will continue with the same intensity even in the future. i would like to emphasise that the argument of transparency enhancement remains equally valuable also for the rest of financial system. transparency, without becoming an end in itself, and without damaging the achievement of final objectives of the business is a necessary market element for building confidence and expanding business relations, in products and volume, maintaining the financial system equilibrium and stability. in this framework, transparency should become a global concept of the financial market for products, services and actions taken by it. to this end, i would request from the banking system to further enhance its transparency with the public, particularly in terms of explaining simply and sincerely the products it provides, the commissions it applies, without leaving behind the publication in due time and quality of financial results, pursuant to legal obligations. in this context, i would like to let you know that the bank of albania will be rigorous in meeting all the obligations arising from the observance of laws and regulatory basis. as my friend eijffinger states : “ transparency seems to mean different things to different people ”, it is understandable that the debate remains open to both, academic and practical plane. new elements, quantitative indicators, empirical models are constantly added to it. the material to be presented today, adds a new value in this regard, with practical importance for central banks. i am confident that today we will have the opportunity and pleasure to expand our knowledge and consolidate our confidence in transparency effectiveness. i invite you to be full of attention for the presentation. honourable professor eijffinger, i thank you for accepting my invitation to present your research in tirana, and i wish you have a pleasant experience during your stay in albania.