The banking system remains prudential in selecting the projects it finances, as a consequence of deteriorated loan portfolio quality and uncertainties surrounding the future outlook. Banks continued to maintain tight lending standards, appearing rather selective in assessing the business plans and meeting the demand for loan. Overall, the Bank of Albania assesses that creating a positive climate assists in recovering lending and the demand for loan. The Albanian banking system remains well-capitalised, liquid and capable of meeting the economy’s needs for credit. However, within the parameters of financial prudence, it should be forward-looking about its decisions and more flexible in providing financial support to Albanian business. Financial markets were characterised by a downward interest rate trend over the third quarter, associated with low liquidity pressures and reflecting the Bank of Albania’s easing monetary policy. 2  BIS central bankers’ speeches  Increased interbank market activity suggests the increased efficiency in using this market and is a good premise for developing the overall monetary market in Albania. Over the period, the easing monetary policy signals in terms of lowering the government security yields were better transmitted. This transmission was favoured by completion of structural movements in the banking system and reduced government demand for funding. Deposit interest rates continued to fall as well, but as already reflected by the high deposit growth over this quarter, they did not restrain the increase in financial savings at the banking system. The easing of financial costs was not fully transmitted to the private sector credit segment during July-August.
Stefan Ingves: Swedish experiences of monetary policy with an inflation target Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Conference on Inflation Targeting, organised by Magyar Nemzeti Bank (the Central Bank of Hungary) at the Hungarian Academy of Sciences, Budapest, 19 January 2007. *  *  *  First and foremost, thank you for the invitation to come here! The theme of my talk here today has a "practical" leaning. I will talk about the Swedish experiences of conducting an inflation-targeting policy and how our monetary policy strategy has developed along the way. Conducting monetary policy is in many ways a learning process. The Swedish experiences of the past decade or so provide a concrete example of how such a process may look. The Riksbank is one of the central banks that conduct monetary policy with an explicit inflation target. This is a group that has grown considerably in recent years. The main reason for this is probably that the experiences of this policy have on the whole been very good. In fact, so good that it has become an interesting alternative even for economies that are already functioning well. However, this was not the case at the beginning of the 1990s, when Sweden changed over from a fixed exchange rate to inflation-targeting and a floating exchange rate. We were then in the middle of a deep economic crisis and a situation where it was necessary to reform the entire stabilization policy framework.