Hence, the banking sector relies heavily in domestic deposits, both in national and foreign currencies, to perform its lending activity. The foreign currency position of the banking sector is quite balanced, as assets and liabilities in foreign currency stand respectively at around 49 percent of total assets, and liabilities of the banking sector to nonresidents (almost entirely in foreign currency) is only 10 percent of total liabilities. The banking sector is well-capitalized and liquid. The capital adequacy ratio stands at around 17 percent, compared to the required minimum of 12 percent. Liquid assets to total assets, is at around 43 percent. In the last 4 years, the average return on equity has been above 20 percent while the average return on assets has been around 1.5 percent. The branch network of the sector counts around 350 branches all over the country. In the last three years mainly, the banking sector has also introduced modern payment infrastructure and products, to allow for increasing usage of electronic payment cards and internet banking. Despite solid performance in the last years the Bank of Albania has been vigilant to point out areas of the banking activity, related with domestic developments that required attention from the banking industry. Until before the appearance of this international financial crisis, we have expressed our concern regarding the rapid increase in lending which, until 2007 reached up to 8-9 percentage points in terms of annual growth to GDP.
We have drawn our plans and the work has been going on for some time. In some cases we can take advantage of our still-remembered experience of the 1992 monetary reform. In other cases, like some settlement-systems-related issues, we must wait for European institutions to make up their minds about the details. There is no doubt, however that technical preparation would not slow us down. IV. In conclusion  Speaking about future developments in Estonia in the light of the challenges shortly discussed above, it is good to bear in mind that policy efforts are necessary also after becoming part of the EU and the EMU. Fulfilling the Maastricht criteria and being 'admitted to the club' cannot be seen as 'the ultimate achievement'. For instance, the recent achievements of the economies of our Nordic neighbours compared to the developments in a wider Europe should make us very aware that there are real advantages in fulfilling the Stability and Growth Pact. I am convinced that EU membership will be beneficial to Estonia. But I am also very sure that Estonia has something to offer to the EU in its turn - some experience on handling issues pertaining to the  BIS Review 42/2003  3  flexibility and mobility of production factors, for example. It is important that Estonia, like every other future EU member state, offer its contribution towards the common goal. 4  BIS Review 42/2003