For the euro area as a whole, the gradual improvement in credit aggregates has continued in recent months with an increase, albeit moderate, in the loans extended to financial corporations and households. Across the euro area, the slight easing in lending standards for firms and households can be seen to have continued, with the exception of those for household mortgage loans, whose standards have been tightened owing to the regulatory changes approved in several countries. BIS central bankers’ speeches  1  In any event, most crucial for how the European financial and banking system will fare in coming years will be the macroeconomic setting. Let me turn now to recent developments in and the outlook for the international and the Spanish economies. The international economy International financial and economic developments have been characterised in recent months by heightened uncertainty. The main factors in this connection are: doubts over the intensity of the adjustment of China’s economy, and its consequences for international trade and the global economy; the future timing and pace of US monetary policy normalisation; and the course of oil prices. The global economy has continued to grow, although at lower rates. The projections in the IMF’s latest report put global growth at 3.1% in 2015, 0.3 pp lower than in 2014, and 0.2 pp lower than the July projection. Noteworthy is the change in the composition of global growth in response to the slowdown of the emerging economies compared with the greater resilience of the developed countries.
Ardian Fullani: The financial future of the region Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the summit of finance ministers and governors “The financial future of the region”, Becici, Montenegro, 14 June 2013. *  *  *  Dear Ministers of Finance, Dear Governors, The crisis we are going through, being so profound and lasting, will leave its mark on economics in general, and central banking in particular. Up until the Great Recession, monetary policy was living in a world that we may call “the inflation targeting era”. To anyone that has followed the discussions regarding the optimal central bank policy ever since the onset of the crisis, it is clear that the validity of the previous approach has been heavily questioned. In many ways inflation targeting made the central bank’s job simple, as long as it followed the policy correctly. The Central Bank, seen by the public as an independent institution, had to credibly commit to an explicit inflation target, in order to anchor mid-term inflation expectations. Self-fulfilling expectations from economic agents and price setters would, in turn, help deliver the objectives of monetary policy. Unfortunately, as shown recently, this strict approach to monetary policy has some shortcomings. What this approach missed, due to its focus in consumer prices, was the drift in prices of assets in general. Escalating asset prices and their sudden burst affected significantly the behaviour and balance sheets of the economic agents and challenged the stability of the financial system.