Fiscal revenues increased 9.0% in annual terms, while budget expenditures were 7.5% lower than the previous year. Our monetary policy easing has also taken into account this feature of fiscal policy that the Bank of Albania has urged and supported. However, the Bank of Albania would like to bring to attention the need for a more uniform distribution of expenditures and budget deficit over the year, to enhance their effectiveness and avoid the fluctuations that their excessive concentration may cause to the country’s economic and financial indicators. BIS central bankers’ speeches  1  The improved foreign demand and positive dynamic of some sectors of the economy were reflected in an increase in annual exports by 10.3% in April. The detailed analysis of trade data reveals encouraging signals about re-exporting and agricultural activities. Trade deficit, however, expanded 1.8% in April, due to the simultaneous increase of imports by 6.0%. In particular, the energy situation continues to burden the trade balance of the country due to high levels of energy imports. Structural improvements to the economy and a more favourable external environment would pave the way for a faster growth of Albanian exports. The Bank of Albania considers this channel as the most appropriate tool to support the country’s sustainable growth in the medium and long term. Projections for low annual inflation rates, against the backdrop of below-potential economic growth, have dictated the pursuit of an easing monetary policy by the Bank of Albania.
Seeking to balance these concerns, I have explored the notion that government support would be triggered by the total losses across an entire group or “vintage” of mortgage-backed securities. Vintage-based support would likely only be triggered by a true systemic shock. A vintage approach would also provide a transparent and finite maximum loss for the private sector to absorb, supporting robustness at the onset, during, and through the aftermath of a crisis. I believe that the costs of the recent devastating economic downturn would have been far less to the taxpayer, and the housing market would have rebounded far quicker, had a vintagebased program containing adequate high-quality private capital been in effect. Attracting private capital to finance residential real estate is another important consideration. It is difficult for institutions that depend on short-term funding to take long-term interest-rate risk – for example, the long-term interest-rate risk posed by 30-year fixed-rate mortgages. It is also difficult for investors who do not do the underwriting themselves to take long-term idiosyncratic credit risk. Securitization backed by a predictable level of government support has a useful function in facilitating the allocation of these different risks to different sets of investors through the To-Be-Announced or “TBA” market. I think the TBA market will be key to ensuring Americans’ continued widespread access to the 30-year fixed-rate mortgage. The TBA market is also important to the role of small banks and lending institutions in a competitive housing finance system.