roe ) increased at 15. 7 %, from 7. 2 %. the capital adequacy ratio was 16. 6 % at the end of 2017, up by around 0. 2 percentage point from a year earlier. the monitored indicators show a mitigation of risks to financial stability. in particular, credit risk fell considerably during 2017, as shown by the fall in non - performing loans. the liquidity risk continues to be low, while the banking system ’ s exposure to market risks remains significant. notwithstanding the positive developments, the bank of albania has continued to work for improving its supervisory capacities and further strengthening the regulatory framework. the macro - prudential policy strategy was compiled and approved in 2017. the implementation of the macro - prudential policy was coordinated with a prudential and pro - active supervision. the supervisory practice improved regarding the methodology for banks control, the approximation of standards with basel principles and the efforts to adopt the best international practices. let me now focus on the preparation of the regulatory framework on the internal capital adequacy assessment process. this framework was prepared in the light of basel principles and eu directives. the internal capital adequacy assessment process is particularly important, as its complements the supervisory perspective with the self - assessment dimension of banks. significant changes have been made regarding the prevention process of money laundering, through the revision of the relevant regulatory framework. the revision of the supervisory methodology on the qualitative assessment of the corporate governance in banks, of the functioning and independence of their committees, of the internal audit structure in assessing the risks and their functioning continued during 2017. in this project, we partnered with the european bank for reconstruction and development. notwithstanding the progress made in reducing the non - performing loans, attention has been paid to the achievement of banks ’ annual objectives regarding the situation of non - performing loans and the compilation of the recovery and resolution plans for larger borrowers. banks report regularly to the bank of albania on the level of their relationships with every borrower, as well as the expectations and plans on future developments, in compliance with our requirements. with assistance from the world bank and the international monetary fund, a regulatory framework, aiming to encourage the collaboration and coordination of banks for addressing common borrowers, is being compiled. special attention is being paid to the consolidating processes with the expected merger of two banks in albania and the strategic plans on the re - positioning in the market depending on the dominant short and long - term

of banks, credit portfolio to private sector grew steadily and rapidly over 2023, presently standing at 14 %. growth in lending was characterised by certain positive features : i ) new loans were broadlybased by sector ; ii ) it was concentrated in our national currency ; iii ) it showed an increasing orientation towards investment financing, and did not jeopardise the overall quality of credit portfolio. all the three features have continued and further strengthened during 2024. inflation and expectations on inflation, as a result of this reaction, stay already close to our 3 % target, while forecasts for the future are positive. banking supervision and financial stability the increase in interest rates and higher uncertainties experienced over the past two years in albania and worldwide, have created a challenging environment to banking activity and financial stability. nevertheless, our banking system and financial stability in albania appear solid. in particular, the albanian banking sector closed 2023 with a 3 / 6 bis - central bankers'speeches positive financial result, a high liquidity and capitalisation level, and a further improved credit quality. our analyses show that systemic risks to banking sector remain contained. in particular, two important achievements were recorded by the albanian financial sector last year. first, the removal of albania from fatf'list of jurisdictions under increased monitoring, regarding the development of infrastructure for anti - money laundering and counter - terrorism financing, known as " grey list ", constitutes the pivotal point of the reforms undertaken by the albanian institutions, including the bank of albania, to fulfil the necessary criteria. albania taken off fatf grey list marks an important achievement for our country, the economy and the reputation of albania, as it is a demonstration of trust by the international community on the albania's dedication against money laundering and combating terrorist financing. second, upon the delisting from the " grey list ", the bank of albania has started the procedures to receive the equivalence status of our supervision and regulatory framework with the european union standards. our preliminary assessments suggest a level of convergence of approximately 90 % with these standards. therefore, we have submitted the official request to the european banking authority ( eba ), and we are expecting to start our discussions on the equivalence assessment process for albania. this equivalence assessment will enable the increase of lending to economy from the european commercial banks that conduct their activity in albania. the resilience, sustainability and flexibility of the financial system against the recent challenges reflect a supervision, which is both meticulous and efficient, as well