BIS central bankers’ speeches  5  Using economic development as an instrument for portfolio diversification, GDP per capita projections can be used to simulate the possible future course of home bias. Futurology of this kind of course comes with large caveats and confidence intervals. Given the simplicity of the model, it is a thought-experiment rather than a forecast. And underlying that experiment is an assumption that advanced countries continue to grow and diversify their equity portfolios, but at a slower rate than catch-up emerging market economies. Table 2 shows the evolution of equity home bias at decadal intervals out to 2050 for the G20 in this thought-experiment. Some clear points emerge:   All G20 countries see a reduction in home bias. The un-weighted G20 average home bias index falls by 0.33 between 2010 and 2050. That is roughly the same rate of descent as over the past 10 years or so.   Among a number of advanced countries, home bias has been significantly eroded by 2050, in some cases perhaps implausibly so. For example, in the US home bias falls from 0.51 to 0.09.   Emerging market home bias remains in many cases significant even by the end of the period, reflecting their higher starting point. Average emerging market home bias in 2050 is not dissimilar to advanced country home bias in 2010.   The implied reductions in home bias would have a potentially significant impact on the pattern of global capital flows.
The third step is the resolution of banks, applied by the Bank of Albania in view of the new mandate. Similar to recovery plans, the resolution plans drafted by the Bank of Albania aim to identify the legal and structural obstacles and difficulties with financial resources that banks face, toward resolvability. In this regard, the resolution plans are one of the key instruments to facilitate the Bank of Albania’s resolution implementation. This year in April, the Bank of Albania approved a bylaw that defines the content of resolution plans. Then banks were required to report a broad set of data for drafting these plans, based on the model of the European Banking Authority and we are currently in the process of drafting them. The drafting of the banks resolution plans is complicated, which includes complex and cross-border issues that must be implemented and coordinated within a short period of time. Hence, the resolution planning is an on-going process and a long-term mission to remove obstacles against the possibility for resolution action in banks. This planning does not mean drafting an annual plan that is stored somewhere in some shelf and it is dusted off only when its implementation is necessary; instead, it is the beginning of a long process of restructuring all aspects of the banking business that may hinder this process.