it practically doubled in two years. Over the same period 2001-2007, 570,000 new houses per year on average were built, house prices increased twofold in real terms, and by 2.5 times in nominal terms. As the Report notes, this process adjusted to a dynamic consistent with what may be considered to be a speculative real estate bubble, meaning that the attendant prices stood far above what the fundamentals in the respective markets – and naturally the housing market – would have warranted. 4/14  The increase in credit and its concentration in the real estate sector came about at a time at which the Spanish economy was undergoing deep-seated changes, on two fronts in particular: the adoption of the euro and rapid demographic growth, which made it difficult to assess the scale of the imbalances. The adoption of the euro as from 1999 entailed the disappearance of the adjustment mechanism for the exchange rate against the rest of the euro area countries and the adoption of the common monetary policy, which maintained an expansionary stance during those years, with an appreciable reduction in the interest rates prevailing for the Spanish economy. The monetary policy stance was appropriate for the area as a whole, but was no doubt overly expansionary for Spain. The build-up of imbalances also occurred in other euro area countries, in a setting in which different institutions, analysts and economic policymakers confided excessively in the stabilising effect of the euro.
The today initiative is a significant event, to sustain the growth of financing for this vital part of the economy and it will help to soften the negative impacts of the world economy slowdown. I encourage the banking system and the other players of the market to undertake similar initiatives in order to not impede the financing of small projects, which owns the possibility to be transformed into profitable enterprises. At the same time to maintain a stable and long-term progress of the country, in line with its European aspirations, the banking system should go on the way toward the perfection of service versus the clients, the intensification of communication and public education. Bank of Albania believes that the sources of the stable growth for the mid-term and long-term period consist not only on the encouragement of the work productivity increase or of the investments in industry and construction, but also in other strategic sectors. For the Albanian economy as a developing economy, domestic investments and foreign direct investments in strategic sectors as tourism and infrastructure shall be a real foundation to the economic growth. The positive chain effects are expected to be reflected on the preservation of the steady growth rhythms. Hence, the overall macroeconomic stability will be seen as a precondition in promoting the further intensification of the domestic and foreign investments.