our analyses show weak monetary pressures on inflation. money supply expanded at slow paces during 2013, supported mainly by the private - sector demand, which was marked in the first half of the year. lending remained weak, reflecting economic agents ’ low demand for financing and banks ’ conservative lending policies. lowering credit interest rates in the fourth quarter did not boost the credit demand. at year - end, the annual change in the banks ’ loan portfolio settled at – 1. 2 %. * * * our baseline projections for future economic developments show a gradually recovered growth rate in 2014. alongside the positive external demand, private - sector demand will improve this year. private - sector arrears payment is believed to improve this sector ’ s liquidity and ease the banks ’ balance sheets. also, accumulating financial savings and easing monetary policy stimulus will materialise into better performance of private investment and consumption. besides improvement, the albanian economy is expected to operate below potential over the period ahead. below - potential economic growth and weak inflation pressures from the external sector will lead to a low inflation rate. at the end of discussions, the supervisory council decided to lower the key interest rate by 0. 25 percentage points, to 2. 75 %. given the available information, the bank of albania deems that the expected economic and financial outlook requires maintaining an easing monetary policy over the quarters ahead to help create the proper conditions for meeting inflation target in the medium term. bis central bankers ’ speeches

ardian fullani : strengthening linkages in south east europe. policy anchors and business perspectives speech by mr ardian fullani, governor of the bank of albania, at the joint conference of the bank of albania and the university of oxford “ strengthening linkages in south east europe. policy anchors and business perspectives ”, tirana, 19 september 2013. * * * your excellency prime minister of albania, honourable guests from the university of oxford, dear representatives of the diplomatic corps and academia, dear participants, i have the pleasure and honour to open this joint conference of the bank of albania and the university of oxford, on strengthening the linkages between the economies in our region. three years ago, in september 2010, we invited the university of oxford to support the academic discussion of the bank of albania on the economic growth model and its regional character. at that moment, this debate was misinterpreted as a discussion on the advantages of the market economy and alternative philosophies of the economic organisation of a society. nonetheless, after three years, we all find that the economic growth model has become the main topic of academic, economic and political debate. for a number of years, our economy has been under the grip of the global crisis, reflected mainly in a decelerated economic activity. consequently, investments and lending to the economy slowed down, deteriorating, at the same time, the private and public sector balances. in spite of these developments, the albanian economy has managed to maintain price stability and the overall macroeconomic and financial balances. the albanian financial system has proven highly immune. despite the economic growth slowdown, overall, this system remains liquid, well capitalised and profitable, reflecting the prudent work of the bank of albania over the pre - crisis years. bank of albania ’ s prudent policies and the reaction of the banking sector enabled the system to avoid extreme problems, which would require the use of public funds. we should bear in mind that various banking groups from eu countries, heavily hit by the crisis, operate in albania. the stability of the banking sector has been at the heart of work of the bank of albania, focusing on both financial stability and banking supervision, and on monetary policy and liquidity management. the bank of albania has been proactive and has anticipated problems, aligning itself and the role of its policies with global developments and the domestic market state of affairs. the dim global financial and economic situation has dictated the need to redefine the