The central banks draft, implement, monitor and assess their monetary, micro and macro-prudential policies against the backdrop of a highly integrated and interdependent global economy. On the one hand, integration bolsters economic growth, enabling a more efficient distribution of labour and capital, thus facilitating the transfer of knowledge and of technology, and promotes the adoption of best practices in economic and financial management. On the other hand, experience has shown that globalisation may spill over and amplify negative shocks among the countries, hence creating risks to financial stability, which interfere with central bank mandates. The experience of Albania during the transition period and onward perfectly illustrates these aspects. The Albanian economy has benefited from integration with the global economy; but, recently, we have also been under the pressure from consequences that some of our trading partners experienced due to the financial crisis. Therefore, our response functions have become increasingly complex, relating not only to the adjustment of the domestic product, labour and capital markets to external shocks, but also to the performance of international markets. This reality requires us to be heedful of international developments, and seek common solutions for the challenges we are facing. 1/3  BIS central bankers' speeches  The cooperation, coordination of policies and strengthening of effective dialogue between central banks is an indispensable requisite for drawing advantages from the opportunities arising from economic, financial and technological integration, and enhancing the immunity against the relevant challenges. 2.
Sunil Mendis: Financial system stability and Basel II - the way forward Inaugural address by the Chief Guest Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, at the 17th Anniversary Convention of the Association of Professional Bankers, Colombo, Sri Lanka, 28 August 2005. *  *  *  Ladies and Gentlemen It is an honour for me to be invited to give the keynote address at this forum of eminent bankers in Sri Lanka and distinguished persons from the international banking arena. I am happy to see our friends from the Reserve Bank of India and from the Basel Committee who will no doubt make this convention very lively for discussion on a subject which concerns us all. As Central Bankers we have a common interest in ensuring financial stability which impacts upon the macroeconomic performance. Further, as monetary policy transmission takes place through the financial institutions for the achievement of its target of economic and price stability, the Central Bank has the responsibility for ensuring that the financial system as a whole is sound. It should be strong enough to withstand internal and external shocks. We must ensure that our payments and settlements system is protected from the risk of failure at any cost since it is the conduit through which our economic business and commercial activity is facilitated.