There are essentially two objectives here. So there is a missing set of instruments. And the big question is whether a set can be devised that stack up not only in theory but in practice; instruments that can be used in the real world. Having first flagged 18 months or so ago that the Bank would work on this general area, earlier this year I set out four questions which the debate would need to address; 7 objectives,  6  See, Bean C. R “The Great Moderation, the Great Panic and the Great Contraction”, Schumpeter Lecture at the Annual Congress of the European Economic Association, Barcelona, August 2009 and “Some Lessons for Monetary Policy from the Recent Financial Turmoil”, remarks at Conference on Globalisation, Inflation and Monetary Policy, Istanbul, November 2008. Also Dale S, “Inflation Targeting: Learning the Lessons from the Financial Crisis”, remarks at the Society of Business Economists’ Annual Conference, London, June 2009. 7  My remarks at the Institutional Money Market Funds Association Annual Dinner in London on 2 April 2008 included the following on macroprudential policy: “Looking ahead further, the big question will be whether the authorities can tame the credit cycle without sacrificing the incentives to enterprise that are so important in a dynamic economy. The debate about the micro regulation of banks will need to take account of whether or not we can deliver that macroprudential objective. For too long, the debate has got sidetracked. Into whether we can rely on monetary policy “mopping up” after bubbles burst.
The outcome of these developments is that a new focus is being placed on deposit insurance in the post crisis period. Deposit insurance is now considered as an essential crisis management tool and an important instrument for orderly liquidation of an unsound financial institution. A well-designed deposit guarantee scheme largely supports financial stability and financial crisis resolution by mitigating risks of and maintaining trust in the 1/3  BIS central bankers' speeches  financial system. However, recalling one of the most important lessons we learned from the global financial crisis, despite the mandate given to any institution, no player can alone deal with a systemic crisis and the consequences of strong spillover effects and contagion risks. It is essential that each element of the safety net develops robust mechanisms that aim to resolve financial institutions and stabilize the financial system as smoothly as possible, minimizing the cost to the economy. Moreover, financial stability can only be preserved by a well-coordinated financial safety net, which is supported by a resilient legal framework, proper tools and instruments and careful contingency planning for each of its elements. The Bank of Albania has dedicated much of the past 10 years to integrating the lessons learned from the recent financial crises into a new regulatory framework. Our financial safety net is further aligned with international best practices, as we coordinate our roles as supervisory authority, lender of last resort and, recently, resolution authority as well.