Now it could of course also be argued that the extension of the “single passport” to most aspects of the provision of financial services foreseen by the Financial Services Action Plan could well expose the accession countries to new risks, particularly those emanating from within the EU itself, with which  3  Caviglia, G., Krause, G & C., Thimann. 2002. Key Features of the financial sectors in EU accession countries, in Financial Sectors in EU Accession Countries. ed., C. Thimann C. Frankfurt: European Central Bank. 4  Claessens, S., Demirguc-Kunt, A & H. Huizinga. 1998 (rev 2000). How does Foreign Entry Affect the Domestic Banking Market? World Bank Working Paper No. 1918. Washington: World Bank. these countries are already closely integrated. Indeed, the ECB has itself recently stated that the integration of financial markets in the region could increase the chances of systemic disturbances 5 affecting more than one Member State. In this regard, Dr Buch’s paper on the implications for financial stability of foreign bank entry should help to place the discussion in an empirical context. Another important aspect of financial market integration relates to regulation and supervision. As the process intensifies, the distinction between different types of financial institutions and markets will become increasingly blurred.
In the near future, the exporting sector of the economy is expected to be sustained by improved demand in Albania’s trading partners. Fiscal indicators were characterised by higher revenues and lower expenditures during the first two months of the year. As of February, budget revenues increased 4.9%, year on year, whereas expenditure and budget deficit fell 9% and 82%, respectively. Expenditures  BIS central bankers’ speeches  1  decreased mainly due to downward capital spending, while revenues upped thanks to increase in tax revenues. These developments have determined a consolidating trend of the fiscal policy and have kept its impact on aggregate demand and economic growth subdued. Excluding the effect of payment arrears, the consolidating trend of the fiscal policy is expected to be maintained over the medium-term period. As always, the Bank of Albania endorses and encourages measures for fiscal consolidation, considering them as necessary for reducing risk premia in the economy and maintaining the country’s medium and long-term stability. Moreover, the Government will pay a part of its arrears to businesses within this budget year. This development is expected to improve the private sector’s balance sheets and demand. In response to the easing monetary policy and the liquidity situation, financial markets have been calm, in terms of trading, showing a tendency to cut interest rates. The latest key interest rate cut in February is transmitted to short-term interest rates in the money market.