respective programs and other necessary requisites so that foreign experts may provide longer term assistance to ensure consistency of the training content and quality. this process would be carried out also by a thorough ex - post assessment of these projects. finally, i avail myself of this opportunity to thank the us government and other donors, usaid mission in albania, fsvc ’ s board of directors and its staff in tirana for raising the necessary financial resources to support this cooperation program. i would like to reiterate the commitment of the bank of albania for a fruitful and effective cooperation. thank you! bis central bankers ’ speeches

only over a period of time, but in our case, within months of publication, one of the underlying assumptions of the 2010 stress tests was unluckily undermined. we had to go public on them part - way through the big programme of loan purchases by the state property company nama. these loan purchases crystallised those embedded bank losses immediately, but the prices at which the purchases would be made were calculated in a very elaborate and time - consuming way mandated by competition law. the stress - test ’ s seemingly aggressive assumption that the seemingly severe haircuts in the first tranche of loan purchases would read through to the lower tranches also proved to be wrong. with hindsight it would have been great to have built in more insulation by providing for even tougher haircuts ; but at the time it would have seemed an arbitrary and hard to justify exercise of regulatory powers. this year, we are determined to present a stress test that will not only be more convincing to the market, by providing much more granular detail, but also be better insulated against surprises by using aggressive stress assumptions and modelling. the emphasis is clearly on determining appropriate capital levels to meet stresses. the higher capital required will be driven by this rather than from any increase in expected losses : to be sure the somewhat weaker economic growth projections now available would imply some increase in expected losses, but it is the stress scenario that is the focus of the present exercise. we will seek to largely free the tests of any excessive expectations from irish exceptionalism in loan - loss recoveries ( over the years very few irish residential mortgages have been foreclosed in downturns by comparison with the experience in the uk and us, for example : with the help of external consultants we are referencing experience in those countries – though not slavishly so – in the analysis that will lead us to choose new tougher capital levels for the banks sufficient to convince the markets. and less reliance will be made on extrapolation from recent experience. * * * the downsizing of the banks is already under way. not only did they enter the crisis with sizable businesses outside ireland, including a long - standing presence in the uk, as well as more recent ventures in poland and the united states, among others, but their large property - backed portfolios of lending to irish borrowers was heavily financed by wholesale international borrowing most of which has now been repaid, and replaced, for the time being by central bank funding. by