This would also include new growth areas such as micro-financing or agricultural lending. The aim is to produce niche players delivering specialized value added products and services that will be able to cater towards specific segments of the market and over time, and thus develop a more comprehensive financial system that would contribute towards the development of a more diversified economy. Given the background of emerging economies, the transition to a more liberalised environment would indeed demand appropriate sequencing of measures and careful management of the liberalisation process that are guided by broad principles that would ensure that there are benefits and opportunities brought about by the liberalisation process. The financial sector is an important and strategic sector that has a significant role in supporting the economic growth and transformation. Liberalisation needs to commensurate with the pace of economic development and strength of the regulatory structure to avoid destabilising effects on the stability of the financial sector and the overall economy. Key considerations for the strategic opening up of the financial sector would be to steer the financial sector towards increased competition whilst ensuring domestic financial institutions are not marginalised by the liberalisation process. Liberalisation should instead serve as a catalyst for domestic banks to further improve their performance and enhance efficiency and capabilities in order to sharpen their competitive edge and elevate themselves to a level that is at par with the international players.
The object of this forum is to discuss the prime pre-conditions to be met by the Bank of Albania before launching the implementation of a new monetary policy strategy, with a particular emphasis on Albania’s membership to the European Union in the long-term run. The fact that we have been successful in controlling inflation during the last years holds true. We have managed to attain a general stability and I believe the policy adopted by us has been one of the key factors. Another fact which holds true is that, for some time, we have been considering to take another step, attempting a more sophisticated, effective and certainly a more responsible and transparent monetary policy approach. To this aim, we have come to the conclusion that the actual framework of the monetary policy requires the necessity of being further completed and perfected with standard elements, adopted by other countries in the world and where the targeting inflation regime has proven to be successful. We are aware that this is not an effortless initiative to be seized. Therefore, I consider that this is a great fortune for the Bank of Albania to have the possibility, on the verge of discussing the preconditions of adopting this regime, to closely discuss and consult the distinguished guests present in this seminar. I trust straight opinions and recommendations shall be brought forth, be they challenging to be accomplished. According to theory, inflation targeting is a direct regime.