The quality of credit portfolio improved substantially. ii. In the seven-year period from 1997 to 2003, the average share of nonperforming credits in the total credits equaled 19.2%, and in the period from 2004 to 2010 it reduced to 10.8%. At the end of 2010, it equaled 9%, which is an improvement of more than twice. iii. The average share of credits in the three riskiest categories (C, D and E) in the banks’ own funds reduced from 54% (1997–2003) to 22% (2004–2010), which is an improvement of 2.4 times. These achievements result from the improved bank governance and the advanced NBRM supervision based on the improving regulation. iv. In the 1997 to 2003 period, the credit interest rate, on average for all maturities, equaled 18.6%, and 10.8% in the last seven years (2004–2010). Presently, the average interest rate on new credits equals 8.1% (for Denar credits), which is a decrease of more than twice. 2  BIS central bankers’ speeches  (6) Back in 2004, we started analyzing the financial system stability, six years before it became our second objective, defined by the new NBRM Law. This is the fifth subsequent year that we develop and publish an annual financial stability report. (7) We significantly advanced the Bank’s institutional capacity. We adopted new models, methodologies, analytical techniques, econometric analyses. The number of training courses for the staff, especially abroad, increases year after year. We dramatically improved the staff educational structure. In 2004, 44% of the total staff number were university graduates.
The IMF’s Chief of Mission at that time asked me to meet “in six eyes”: mine two and their four. He suggested a devaluation of at least 20%. I told him that I will answer tomorrow. The next day I told him that we will discuss again in autumn during his next visit. The situation calmed during the summer. We started purchasing foreign currency, and the favorable situation continued. Nobody ever opened this issue again. They gave up. The second moment was the closing of Makedonska Banka and forcing few other shareholders to abandon the banking business. It was a very erratic experience. They played extremely unfairly. They were developing and managed to develop dirty plots. They also threatened. They made a mistake. The decisions we believed in were unchangeable. We cleaned the banking sector from shareholders who were not eligible, on any ground. We fixed several weak points in the system thanks to our decisiveness and integrity. And, as to the organizers of dirty campaigns, you know the information. The third, extremely dramatic moment was the end of 2008 and the first half of 2009: the global recession. In that period we spent 500 millions of Euros defending the exchange rate – one third of their total level. We had to try our hardest, otherwise we were about to face an economic disaster. We were criticized for undertaking measures contrary to those undertaken by developed economies. They failed to see that such comparisons will not wash.