PRESS RELEASE
Questions and answers at the Governor’s press conference, 31 July 2013

Question - You said that the fiscal policy should be more contained during the second half of the year, when an auditing of public finances is also expected to take place. What will be the role of the Bank of Albania in this controlling (auditing) of public finances, taking into account that the prime minister - designate has said that there will be an international auditing? Do you think that you should also have a bigger role on public finances?

Answer - In a market economy the roles are clearly defined and separated. The fundamental objective, according to the statute of the Bank of Albania, is maintaining price stability and financial stability to ensure long-term sustainable growth. These are our two main duties. We have also deemed that another important task for us is the public's financial education. The need for financial education of the public is prominent, as it may also be inferred from the content of your question.

Usually, there is the complaint that central banks become annoying for repeatedly saying the same things. However, I believe that this is the basis of our work. This becomes necessary also because, in spite of repeatedly explaining the public the mandate of the Bank of Albania, which conforms to the modern model of a central bank, we are repeatedly asked such questions.

With regard to our activity, the financial and banking market is our only counterparty. We supply the market with the necessary liquidity, but the distribution is a decision for the market to make.  This is the dividing line between a private sector, a state bank we once used to have and a modern central bank. Our counterparty is the market. According to a simple but meaningful explanation of Milton Friedman, the central bank only supplies liquidity when needed and withdraws it when in excess.

On the other hand, I think that any new government, from day one of its work would ask for an auditing of its accounts. This is an exercise that has always been done, and will continue to be done; it is for the government, however, to decide whether to engage local or foreign agencies.

We are used to it. Throughout the entire period, we have had the International Monetary Fund as a certifier of Albania's economic and financial situation. It is a functional task to know the country's economic and financial accounts. A part of it has started with the FSAP programme, and the rest of it will continue with the IMF's mission in September. At the same time, the government may engage, and is welcomed to do so, any agency it deems as appropriate.

What is important is the government's commitment to establish a clear, functional and transparent infrastructure with a view to make an inventory and execute payment for the so-called obligations.

The central bank stands ready and is fully committed, as always, because, after all, it is us, the Government of Albania, the Bank of Albania, and the Albanian agents that supply  the data to the agencies that verify such data.