8 So, although we cannot entirely discount the role of monetary policy as a tool for averting financial crises, it is not reasonable to assume that monetary policy can do this on its own: 9 at least not without risking serious side effects in the economy as a whole. The repo rate affects the entire economy and cannot be directed at specific markets alone. It can thus have a negative impact on sectors that are not overheated. Increasing the repo rate in order to mitigate household credit growth and increases in housing prices also makes it more expensive for firms to fund new investments. In situations in which investment is low and unemployment is high this is something one wants to avoid. In such situations it would be inappropriate to use the repo rate as a means of pursuing macroprudential policy. My view is that it is only justifiable to use the repo rate in this way in cases where there is reason to believe that the central bank is the only body that can take measures to counteract what appears to be an unbalanced development. So what about fiscal policy? Can’t fiscal policy be used to counteract an unbalanced development? Yes, under certain circumstances. As I mentioned earlier, stricter budget discipline would probably have counteracted overheating in some European countries, but it could not of course have averted the financial crisis, which was largely “imported”.
The products we are getting ready to launch soon, that means the confidence indices, have to justify their designation. Stated differently, the public must believe the product of the Bank of Albania is reliable, that product is the object and the real indicator of the public’s expectations. In the meantime, we expect to have back the echo of the public’s trust. Wishing you all a fruitful working-day, Thank you! 2  BIS Review 118/2006