Ardian Fullani: Macrofinancial stability in EU candidate countries and potential candidate countries – lessons to be learned Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the High-level Policy Workshop on Macro-prudential Policy, Frankfurt am Main, 14 December 2010. *  *  *  Dear colleagues, It is a pleasure to discuss with you our experience with the crisis and share some thoughts on the relevant lessons for the future. My perspective on this issue will focus on the case of Albania; an emerging market economy which imported the crisis through financial market channels and interconnectedness. The challenges posed to eastern European economies and decision makers were mostly the same in nature, while their policy response differed according to economic structures, institutional differences and degrees of freedom enjoyed by them. Let me briefly preview the three main messages of my speech. The first one is that there is no conflict between price stability and financial system stability in the long run – instead, they do mutually re-enforce each other and the resilience of the economy to external and internal shocks. From a central bank’s point of view, a corollary to this is that any macro-prudential measure taken to enhance financial stability is an investment in medium and long term price stability. I believe this conclusion is amply borne from Albania’s recent experience. My second message is that global or even regional financial markets require global or at least regional supervision and crisis resolution mechanisms.
We have seen that the links to the central banks work best when the staff at the Swedish embassies in the respective countries are actively involved and regularly follow up what is happening in the respective banks. At the beginning of this year, Sida commissioned an evaluation of the Riksbank’s cooperation so far with Sri Lanka and Vietnam. The evaluation showed that the Riksbank’s efforts in these central banks had been both successful and appreciated by the recipients. The very fact that we are colleagues, that we do the same things, have the same responsibility, was one of the key factors. There are many  BIS Review 123/2006  1  consultants; colleagues are harder to find. The long-term thinking behind the cooperation is also an important factor. We do not merely make an analysis, write a report and disappear. We are still here and can continue the discussion whenever necessary. The problems that were indicated in the evaluation were more of an administrative nature. For instance, it is difficult to find a place in a foreign aid context for low-cost projects like this, as they do not really follow the set patterns for other aid efforts. Finally, I can mention that the Riksbank has allocated resources in our internal business plan for next year to extend our cooperation with some of the central banks in Sida’s cooperating countries.