Let me now inform you further on the monetary policy implemented by the Bank of Albania. 2. Bank of Albania’s monetary policy  The primary objective of the Bank of Albania is to achieve and maintain price stability. In quantitative terms, the Bank of Albania aims to keep the CPI inflation at around 3.00%. The inflation target is set to be achieved in the medium-term period, while the actual inflation may be subject to short-term deviations from the target, due to unexpected shocks or shocks independent from the monetary policy. Monetary policy decisions are forward looking and in line with market principles. In 2013, the weak inflationary pressures were reflected in lower annual inflation, which averaged 1.9%, ranging close to the lower bound of Bank of Albania’s tolerance band. It pursued a downward trend during the year, being more pronounced in the second half of the year. Unprocessed foods inflation accounted for around 90% of the headline inflation, hence determining the direction and fluctuation of the CPI inflation. From the viewpoint of macroeconomic factors, consumer prices have reflected, first of all, the weak demand for goods and services, a factor that has generated low inflation over the last two years. Increase in demand, which was significantly below Albania’s production capacity, 2  BIS central bankers’ speeches  generated weak pressures for rise in the labour and production costs, and in the profit margin. Supply-side factors also influenced inflation on the downside.
Market-making serves an important function, and it is important that trading desks can intervene and buy during flash crashes or sell during flash surges. Permitting this could provide greater liquidity and stability to financial markets. I would also exempt smaller banking institutions from the Volcker rule since they rarely, if ever, engage in proprietary trading. Do no harm Many speculate that Congress will make changes to the Dodd-Frank Act. If the scope is confined mainly to small bank relief and adjusting how the Volcker rule is applied, I have no objection. But, because the Dodd-Frank Act addresses many of the key lessons of the crisis, I think it appropriate that changes be made carefully—with a paring knife, rather than with a meat cleaver. Here, I would underscore the importance of preserving higher capital and liquidity requirements for systemically important banks; Title VII, which mandates the central clearing of standardized OTC derivatives; and Title VIII, which gives the Federal Reserve an oversight role for financial market utilities that are systemically important, and which helps promote more uniform risk management standards. While Title II gives the FDIC the authority to resolve a large, complex financial firm by converting its debt into equity and establishing a new holding company, I do not think this is necessarily the only way to have a viable resolution regime. However, if Title II were to be eliminated, then the Bankruptcy Code would need to be bolstered.