the downward inflation pressures. we are convinced that the steps we have taken will bring inflation back to our 3 % target, in the medium term. we have managed to anchor the economic agents ’ expectations on inflation. this has enhanced the effectiveness of the monetary policy and contributed to maintaining confidence in the national currency and the albanian financial system. the continuous liquidity injection through transparent and time consistent operations has managed to relieve pressures in financial markets. the key interest rate cut was followed by an overall decline of interest rates in the financial market. bank lending costs, government borrowing costs, and business and consumer borrowing costs have dropped rapidly. all these factors have laid a sound foundation for economic and financial stability in albania. stability is a precondition for sustainable and long - term growth, financial system development, functioning market economy that generates growth, employment and welfare for the country. i take this opportunity to emphasise that this philosophy of prudence and bis central bankers ’ speeches stability will guide our decision - making in the future, as well. the businesses, consumers and financial system will find in the bank of albania an institution determined to maintain economic balances of the country, uphold the value of the national currency, encourage financial markets and support sustainable and long - term development for the country. however, the monetary policy has not been transmitted in full to the real sector of the economy. we are aware of the causes of this phenomenon, which is not an isolated case in albania, but a global - wide one. economic agents ’ uncertainties, economic and financial problems in the euro area, and problems with the balance sheets that characterise a part of the economy are objective obstacles to the monetary stimulus transmission to the economy. nevertheless, we are aware that within this reality, there is room for a more positive approach to consumption and investments, and more lending. uncertainties and reluctance are the main problems standing in the way of the albanian economy. the purpose of this forum is to identify, together, ways to overcome this situation. in this context, i would like to quote president roosevelt : the only thing we have to fear is fear itself. 2. decision - making on banking supervision and financial stability recently, non - performing loans have been mentioned frequently. i will take this opportunity to make the following necessary clarification : first, i would like to underline that we have identified this problem at an early stage and have been very scrupulous with the banking system to evidence every penny of a loan that is not being rep

ardian fullani : recent regulatory amendments in albania – causes and expectations speech by mr ardian fullani, governor of the bank of albania, at the forum with the albanian banking system on “ recent regulatory amendments : causes and expectations ”, tirana, 28 february 2014. * * * dear bank executives, dear participants, i would like to welcome you to this discussion forum between the bank of albania and the banking system. the topic of discussion for this roundtable is to inform you on the recent decisions of the supervisory council of the bank of albania in more details. we are on the last day of the second month of 2014 and we are all witnessing an intensive period of discussion and suggestions between albanian authorities on the one side and international institutions on the other. recovery of economic activity, potential structural reforms, lending to the economy, and financial soundness have been at the core of the discussions. taking into account its role and significance in decision - making, the bank of albania has been an important part of them, materialising its contribution with a number of decisions relating to both macroeconomic and banking supervision. following, i would like to share with you in brief the reasons, expectations and the way we will monitor this decision - making. 1. decision - making on monetary policy and money market operations as we have constantly informed, the albanian economy is facing cyclical weakness. in response to the weak demand, the albanian economy is growing below its potential, inflation is low, public and private balance sheets show difficulties, and the banking system has been facing upward non - performing loans. these problems have been detected at an early stage by the bank of albania and we have, therefore, taken relevant measures to tackle them. the monetary policy of the bank of albania has been constantly on the easing cycle. the key interest rate reached the record low 2. 75 % last wednesday, from 5. 25 % in 2011. in line with the best practices of central banking, we have adopted a forward - looking communication strategy. i am convinced that not only the financial market, but also the real economy has received our message that the monetary policy is and will continue to be on the easing side in the quarters ahead. moreover, we have intensified our liquidity injection operations, which have succeeded in meeting all the market liquidity needs, by extending the horizon for injection and facilitating access to liquidity by broadening the collateral base. time has proven our monetary and operational policies successful. the bank of albania has managed to contain and control