is essential in crisis prevention and management, as already proved by the experience during the global financial crisis. this role has proactively evolved towards mitigating financial system vulnerabilities even in the absence of deposit runs or banks in default. it is now a fact that deposit guarantee schemes mitigated the recent financial crisis, using every possible instrument available to them, such as : increasing the deposits coverage limit ; expanding the scope of the guarantee scheme ; and providing faster deposit pay - outs or even liquidity support. the outcome of these developments is that a new focus is being placed on deposit insurance in the post crisis period. deposit insurance is now considered as an essential crisis management tool and an important instrument for orderly liquidation of an unsound financial institution. a well - designed deposit guarantee scheme largely supports financial stability and financial crisis resolution by mitigating risks of and maintaining trust in the 1 / 3 bis central bankers'speeches financial system. however, recalling one of the most important lessons we learned from the global financial crisis, despite the mandate given to any institution, no player can alone deal with a systemic crisis and the consequences of strong spillover effects and contagion risks. it is essential that each element of the safety net develops robust mechanisms that aim to resolve financial institutions and stabilize the financial system as smoothly as possible, minimizing the cost to the economy. moreover, financial stability can only be preserved by a well - coordinated financial safety net, which is supported by a resilient legal framework, proper tools and instruments and careful contingency planning for each of its elements. the bank of albania has dedicated much of the past 10 years to integrating the lessons learned from the recent financial crises into a new regulatory framework. our financial safety net is further aligned with international best practices, as we coordinate our roles as supervisory authority, lender of last resort and, recently, resolution authority as well. our post - crisis regulatory framework points towards a stronger banking sector, based on a more solid capital foundation that ultimately serves to protect deposits and taxpayers ’ money. in this perspective, the bank of albania has reinforced banks ’ capital position with higher requirements for core capital and is developing new demands for macro - prudential buffers, to build up the lossabsorbing capacity of banks in case of financial crisis. moreover, the financial safety net already in place was further strengthened with a new mandate for the bank of albania as the resolution authority. a transposition of the brrd, the new

have selected as a topic for this hearing, euro area inflation rose to 3. 0 per cent in august and we expect it to rise further this autumn. nonetheless, we continue to view this upswing as largely temporary. a range of factors are currently pushing up inflation. chief among them are the strong increase in oil prices since around the middle of last year, the reversal of the temporary vat reduction in germany, and cost pressures arising from temporary shortages of materials and equipment. the impact of these factors should dissipate in the course of next year. although underlying price pressures have edged up over the summer, this is consistent with the opening up of the economy, which remains some distance away from operating at full capacity. as a result, the september ecb staff projections foresee annual inflation at 2. 2 per cent in 2021 then moderating to 1. 7 per cent in 2022 and 1. 5 per cent in 2023. while inflation could prove weaker than foreseen if economic activity were to be affected by a renewed tightening of restrictions, there are some factors that could lead to stronger price pressures than are currently expected. for example, if the temporary shortages of materials and equipment constrain production more persistently than we currently foresee, they could feed through more strongly along the pricing chain. persistently high inflation could also result in higher than anticipated wage demands. but we are seeing limited signs of this risk so far, which means that our baseline scenario continues to foresee inflation remaining below our target over the medium term. favourable financing conditions are essential for the economy to continue its recovery and for inflation to converge durably to our target. we saw market interest rates ease over the summer but recently they have reversed this decline somewhat. however, bank lending conditions have remained very accommodative. overall, this has left financing conditions for the economy remaining very favourable. thus, following a joint assessment of the inflation outlook and financing conditions, the governing council decided earlier this month to set a moderately slower pace of net asset purchases under the pandemic emergency purchase programme. we remain entirely committed to preserving 2 / 4 bis central bankers'speeches these favourable financing conditions, which are necessary for a robust recovery that will restore inflation to its pre - pandemic level. financial stability considerations in our new monetary policy strategy i will now turn to the second topic which you have selected for this hearing, namely the risk of financial dominance. financial dominance occurs when central banks delay the removal of monetary