The financial supervisory authority in Sweden, Finansinspektionen, also promotes stability in the financial system, but with a greater focus on individual institutions – what we usually call microprudential supervision. As knowledge of the risks in individual financial institutions is extremely important for successful macroprudential policy, it is essential that Finansinspektionen also participates in macroprudential policy (see Figure 9). This is particularly important in a country like Sweden with four dominant major banks. Thus, the competence and experience of both the Riksbank and Finansinspektionen will need to be utilised if macroprudential policy is to be effective in Sweden. What other requirements can one reasonably make of a framework for macroprudential policy so that it will function efficiently? The framework for macroprudential policy in Sweden should entail a clear mandate and effective tools… The Riksbank has earlier highlighted a number of general criteria that should be met for macroprudential policy to function successfully, and which I certainly agree with. There are four main criteria.11 Firstly, it is necessary to have a good power for decision making, in the form of a clear mandate and well-defined tools. Secondly, a strong independence from political and sectorspecific considerations is needed, as I mentioned earlier. Independence assumes, thirdly, that there are forms for clearly holding the authorities accountable, for instance, through farreaching requirements for transparency and reporting. Fourthly, a substantial and lasting capacity for analysis is required.
While the long-term objective should be to create conditions for achieving a more balanced and diverse financial system, the shorter times objectives should focus one having a stable financial system that provides adequate financial services to its customers, both savers and borrowers, thus maintaining its fair share of contribution to the economic developments of a particular country. The banking sector in Albania has felt the impact of the international financial crisis, as the weaker credit standards before the crisis and the weaker economic growth afterwards, have been translated into lower asset quality and difficulties to consistently maintain positive financial results. In front of higher credit risk, credit terms have been tightened and credit growth has been sluggish. In September 2013, credit growth turned negative driven by credit in foreign currency and to businesses. However, the banking sector remains well capitalized and liquid. Banks have been able to raise new capital and financial support from their mother banks. Especially, Greek banks operating in Albania have enjoyed strong support from their mother banks so far, and we expect this to continue in the future too, if needed. Overall, in September 2013 the risk  BIS central bankers’ speeches  1  weighted capital of the banking sector stood at 17.8%, while the ratio of liquid assets to short term liabilities was 36.5%. The sector has shown strong preference for investments in Albanian government debt securities and placements abroad. Bank of Albania has been taking a number of measures to support credit growth and address the loan quality problems.