Savings capital is attracted to this and these industries can thereby grow and provide jobs to replace those lost in industries that are declining. This means that equity prices on average and across a business cycle should increase at the same rate as potential GDP-growth plus the risk premium required by investors. However, we know from experience that periods when households and companies have increased their borrowing at a rapid rate and asset prices have risen substantially have often preceded large falls in growth and capacity utilisation in the economy and even led to financial crises. It is only with hindsight that we have been able to note that imbalances had built up. Regulation, fixed exchange rate policy, insufficient supervision and deficiencies in accounting systems have often contributed substantially to imbalances being able to accumulate over a long period of time. However, asset price and credit cycles also appear in many cases to have been exacerbated by exaggerated optimism and speculation, what is known as bubbles. This over-optimism often begins because equity prices in a sector, perhaps as a result of a technological advantage, have risen over a period of time and the optimism then spreads. The problem for those of us responsible for monetary policy is that inflation – measured as consumer prices – has often remained relatively unaffected during these periods. It is difficult to distinguish bubbles from economically-motivated fluctuations in advance, which partly is because we have insufficient experience of credit and asset price cycles in deregulated financial markets.
Thank you, because the allocation of funds from the pre-accession funds for the implementation of this Project, means a trust that we are ready to work on strengthening the institutional capacity and on the mutual cooperation in order to implement the recommendations that will arise from the project activities. I am sure that we will justify the trust. Not only with the level of our commitment to the Project in the next eight months, but also with the willingness to implement all necessary activities for establishing a strong and efficient system for fight against counterfeiting of euro in the country. These activities are already outlined in the strategic commitments of our institutions, because our ultimate goal is to provide a system that, in all aspects, will be at the level of the system of a European Union member state. Only with full dedication, readiness and professionalism, the trust will be fully justified and we will prove that the Project was indeed successful – that the 250,000 Euros intended for its implementation were channeled in the right direction. I am firmly convinced that the Ministry of Interior and the National Bank, as beneficiaries of this Project, will jointly succeed in doing so.