As you can see, the Committee is engaged in a variety of projects that require us to combine the efforts and input of regulators and supervisors across a large number of countries. This is a challenging task. An even greater challenge, however, is prioritising among competing projects to achieve our most pressing objectives. The Committee’s response to the financial crisis has been strong, but there is still much to accomplish. So we have recently spent some time identifying our key strategic priorities, to make sure we have a good means of deciding what we really must do. As you may have seen, these priorities were endorsed by the Group of Governors and Heads of Supervision (GHOS) at the same time they endorsed and announced the revisions to the LCR. The Committee’s primary focus in the short and medium term is completing and embedding the full suite of responses to issues that emerged from the financial crisis. With that in mind, foremost consideration will be given to five priority areas: 1.  completing the crisis-initiated reforms of the policy framework;  2.  monitoring and reinforcing the implementation of Basel regulatory standards;  3.  assessing the impact of, and industry response to, implementation of the regulatory reforms;  4.  examining the comparability of model-based internal risk weightings and considering the appropriate balance between the simplicity, comparability and risk sensitivity of the regulatory framework; and  5.  enhancing the effectiveness of both micro- and macroprudential supervision.
The combined effect of these developments affected negatively the real sector of the economy, mainly the business sector. In the first quarter of this year, business confidence index fell under its historic average, reflecting a more difficult financial situation. The latter was also shown by the lower-thanplanned realization of fiscal revenues as well as by the decline of loan portfolio quality that banking sector has encountered throughout the period. In the short-term, the public authorities took measures to lessen the impact of the global financial crisis in the economy. Through the significant increase of the fiscal expenditures share designated for investments, mainly in infrastructure, the government supplied an important impetus for the support of the real sector of economy to cope with the global crisis effects. The Bank of Albania has also been active to provide liquidity in the interbank market, with the aim to preserve the stability of the banking sector and to lessen the expected decrease of its intermediation role. We removed quantitative limits in the size of the liquidity injections through our week-long reverse repurchase agreements, and extended the maturity of our injection operations up to three months. Following a cut of the policy rate by 0.5 percentage points in January and the subdued inflationary pressures at home, the monetary policy paid an important attention to the financial stability, by keeping the policy interest rate unchanged throughout the period.