While the library at Alexandria succumbed to fire, it is difficult to see the clouds suffering the same fate. Ending quarterly reporting will not bring an end of quarterly capitalism. The flood of information seems set to continue to rise, our cognitive in-box overflowing, our brains rewiring. That begs the question of whether there is another public policy path better able to tackle fat tails and short minds. There may be. It is both an old path and a new path. Along it lie institutions – “humanly devised constraints that structure political, economic and social interactions” (North (1991)). So defined, institutions have long been recognised as key ingredients of stability and growth. In Adam Smith’s “other” book, The Theory of Moral Sentiments, institutions were seen as a necessary foundation for progress (Smith (1759)). They embedded past knowledge – “institutional memory” – thus providing a platform for future development. They also created the security of environment necessary to generate that progress – for example, through the rule of law and property and civil rights. In the late 19th century, economists such as Thorsten Veblen went one step further. They saw institutions as the basic building blocks of economic development (Veblen (1899)). As societies and economies became more complex, institutions were needed to solve increasingly complex collective action problems. They helped co-ordinate the actions of individuals to create public goods such as language, money, the rule of law, even central banks. After a lull of over half a century, institutional economics has re-emerged with a vengeance.
*  *  *  The banking system supervision function is another important aspect of central bank duties. 3. Banking supervision and financial stability  Year 2010 was characterised by increases banking system activity, improved banking soundness and profitability indicators, as well as a good capitalisation of the system. On the other hand, the banking system was characterised by increase in non-performing loan portfolio, reflecting also the active policy of the Bank of Albania in terms of enhancing the transparency of bank balance sheets. Banking system development The banking sector continues to remain the main actor of financial intermediation in Albania. At end-2010, banking system assets doubled compared to a year earlier, accounting for about 81% of GDP. The banking system continued to be financed mainly by public deposits and focused on lending to the private sector. On the other hand, the economy’s below-potential growth and the depreciated exchange rate contributed to increasing non-performing loans, to 14% of total loans. However, this indicator’s growth rates decelerated in 2010. Capital adequacy ratio remained at satisfactory levels, to 15.4%, obviously higher than the 12% benchmark set forth under the regulatory framework. The system’s shareholder equity increased by 10% in 2010. Credit risk remains the main risk to the banking sector. In response to this risk, the banking sector has created adequate provisions to weather big shocks to borrowers’ solvency and market equilibria.