Second, without violating the culture of observing the contractual obligations, it should be more active in the loan restructuring process to provide more room to businesses deserving it. Third, we think that Albania has in place business and development projects of a long-term interest that deserve greater attention. Lack of the loan demand is an already-known and well-understood problem. However, the banking system should be more flexible when assessing the submitted applications. In all my public pronouncements, I have iterated the prudence needed for sound public finances in the country. We deem that the country’s sustainable development economic paradigm requires taking swift measures for making the public finances healthier. Beyond the short-term challenges about the current year’s budget, putting in place a  2  BIS central bankers’ speeches  reliable and transparent fiscal rule is a necessity to discipline the fiscal policy in the long term and guarantee the trust of the financial markets in the Albanian public debt. Finally, the Bank of Albania deems that the macroeconomic stimulus should continue to be based on a stimulating monetary policy and a banking system more focused on the needs of the economy. Also, we believe that the fiscal policy lacks the room for such actions. This action path preserves the macroeconomic stimulus and the soundness of macroeconomic balances, hence providing the shape to the first pillar of development policies. 2. Second pillar: Reducing uncertainty in economy  The second pillar (of a short-term action, as well) relates to reducing uncertainty in the economy.
Svein Gjedrem: Perspectives on the role and effects of monetary policy Introduction by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), for the Holden Committee of Experts assessing the challenges facing the exposed sector, Oslo, 16 January 2003. *  *  *  Introduction The primary objective of monetary policy is to ensure nominal stability. There were wide fluctuations in the Norwegian economy in the 1970s and 1980s. Economic developments were marked by high and variable inflation. Inflation rose gradually and it took a long time before it fell. The absence of a nominal anchor was one of the main reasons behind these pronounced swings in the Norwegian economy. With a policy of low interest rates and devaluations, inflation took root. Nominal interest rates were kept at a low level even though inflation and the value of tax-deductible interest expenditure rose. Frequent devaluations from 1976 were not able to prevent a decline in the manufacturing sector. On the contrary, they proved to be self-reinforcing. The wide fluctuations culminated in a credit boom in the mid-1980s, followed by a deep recession and high unemployment towards the end of the 1980s. From the mid-1980s, during and after the credit bubble, it was recognised that a substantial revision in economic policy would be necessary and that the problems created by inflation had to be taken seriously. The exchange rate was chosen as the nominal anchor. A deterioration in competitiveness due to high wage growth would no longer be rectified by means of devaluations.