Lars Heikensten: Reforming a central bank Speech by Mr Lars Heikensten, First Deputy Governor of the Sveriges Riksbank, to the CEPR/SNS Roundtable, Stockholm, 8 June 2001. *  *  *  Thank you for inviting me this evening and for the opportunity of addressing you all. I should like to begin by stressing how much we value the cooperation with CEPR. Creating arenas for an exchange of ideas in Europe is an important task to which CEPR is making a valuable contribution. Today you have been considering a variety of issues and this evening I want to raise yet another, namely how a central bank can be reformed. I do so against the background of the major changes that are currently taking place in our national economies and financial markets. These changes clearly have consequences for the work at central banks. The challenges we in Europe face are particularly great, above all now that EMU is a reality and the single currency imposes new requirements. Work on changes at the Riksbank has been very intensive in recent years and I should like to tell you something about it. What I have to say will no doubt be familiar to many of you in managerial positions in either the private or the public domain. The operations of central banks are really not all that different from those of other enterprises. Issues recur but methods have changed a lot Sveriges Riksbank is the world's oldest central bank. Threadneedle Street's Old Lady is our younger sister.
Liquidity, profitability and capitalisation indicators are at good levels, while the ratio of non-performing loans has trended down. The Bank of Albania has continued to work for the regulation and prudent supervision of the banking system, pursuant to the legal obligations, as well as to sustain its steady development. Also, we have cooperated with: (i)  other public agencies, to improve the legal framework, align regulatory practices, and identify measures for withstanding systemic shocks;  (ii)  international financial institutions, to develop loan restructuring programmes; and,  BIS central bankers’ speeches  1  (iii)  foreign regulatory institutions and parent banking groups operating in Albania, to exchange information. I would like to reiterate that the banking system is solid, liquid and well capitalised for conducting its intermediary function. However, credit growth continues to appear sluggish, due to tight bank lending policies. Maintaining and strengthening banking system soundness is to everyone’s benefit, as this is the only system that, with its funds, may sustain long-term economic growth. Lending is expected to improve slightly during 2015. The Bank of Albania, however, expects an increasingly active role of the banking system in lending and will also take all the needed measures to encourage it. At the conclusion of discussions, the Bank of Albania shares the view that economic policies are performing overall in the right direction.