Still, the high level of annual inflation today is largely due to the significant depreciation of our currency in recent quarters. On the output side, third-quarter figures showed GDP and domestic demand growing less than forecasted. In addition, fourth-quarter figures at hand show no signs of significant recovery. Thus, we foresee that achieving higher output growth rates will take longer than we thought last September. On aggregate, the international scenario has changed little since our last IPoM. Perhaps the most significant development has been the sharp fall in the oil price in the past months, whose effects have begun to show in prices and will intensify in the near future. Meanwhile, although risk perceptions have increased and we had an important volatility episode in October – which vanished soon – no significant changes are observed in terms of global growth. At home, we completed a process of reducing the monetary policy interest rate (MPR), that took it from 5 to 3 percent between October 2013 and October 2014. This sharp reduction led the MPR to quite expansionary territory, in line with the economic slowdown already mentioned. Funding costs in the domestic market have declined significantly, with mortgage loan rates nearing their all-time lows. Notwithstanding, business and household expectations have deteriorated throughout the year and are now clearly pessimistic, influencing downward this year’s growth and slowing further the recovery foreseen for 2015.
Gent Sejko: Supervisory policies after the start of the Banking Union – initial experiences and outlook for CESEE economies Intervention by Mr Gent Sejko, Governor of the Bank of Albania, in 6th ECB Conference on CESEE: “CESEE, old and new policy challenges”, session’s topic “Supervisory policies after the start of the Banking Union – initial experiences and outlook for CESEE economies”, Frankfurt am Main, 10 June 2015. *  *  *  Dear participants: I am honored and pleased to be in this important conference among distinguished professionals of banking and financial industry! I want to start by thanking the organizers for the invitation to be here, but also to congratulate the ECB on its new building: I wish it is as functional, as it is beautiful! Coming from the banking industry, I have been feeling the impact on the banking activity arising from the changing economic and financial environment due to recent global financial crisis. Since my appointment as the new Governor of the Bank of Albania at the beginning of this year, I have been seriously estimating the challenges we face in order to maintain the stability of our banking sector and ensure that it is fit to play its role in support of Albania’s economic growth. In my intervention today, I would like to share with you how we see the impact of changes in the financial landscape, including those in supervision superstructure, on the financial system of CESEE countries and more specifically on Albania’s one.