Mervyn King: The international monetary system Speech by Mr Mervyn King, Governor of the Bank of England, at the “Advancing Enterprise 2005” conference, London, 4 February 2005. *  *  *  Later today the G-7 finance ministers and central bank governors meet in London. Markets are speculating on what the communiqué will or will not say about exchange rates. On such matters a private exchange of views might serve us rather better than a public statement. What is a matter for public discussion, however, is the mix of exchange rate regimes we see in the world today, and the consequences for international monetary stability. The current international monetary system comprises three large currency blocs: the dollar, the euro, and an Asian bloc of currencies that are to varying degrees fixed against the dollar. These blocs, of broadly comparable size, produce more than twothirds of world output in total. Given their size, the choice of exchange rate regime of one bloc has a significant effect on the options available to the others. Countries have always faced constraints in choosing their exchange rate regime. Any country can have only two out of the following three – an independent monetary policy, a fixed exchange rate and an open capital account. At various times countries have tried – and failed – to have all three. But in a world of large currency blocs decisions about exchange rate policies are interdependent.
The Albanian banking sector bore a considerable part of the financial bill of the pandemic and provided a continuous financial support to enterprises and households. In addition, the banking system carried out its function without jeopardising the main parameters of its financial soundness: the level of liquidity; profitability and capitalisation. Nowadays, the public considers our banking system a safe destination to hold their savings; enterprises find a source of funds, services and consultancy, while the economy finds a promoter of development and absorber of shocks. In parallel with these main directions, the Bank of Albania has worked and has achieved successful results in other fields as well, among which I find it appropriate to highlight: The payment system, which is already operating within a legal and regulatory framework in full compliance with the EU standards and with a payment infrastructure in an ongoing modernisation process. Here, I mention the approval of the new Law on the Payment System, which transposes the relevant directive of the European Union and paves the way for increasing the number of actors and strengthening the market effectiveness. Also, in 2/5  BIS central bankers' speeches  January 2022, the Bank of Albania has started operating the complete infrastructure for the processing and settlement of euro denominated payments within Albania. This development will result in lower costs and considerable reduction of the time for the realisation of payments, with a considerable benefit to both the Albanian enterprises and households.