Phoinike

Main Menu

  • Albania Real Estate
  • Albania Lending
  • Albania Credit
  • Albania Economy
  • Loans

Phoinike

Header Banner

Phoinike

  • Albania Real Estate
  • Albania Lending
  • Albania Credit
  • Albania Economy
  • Loans
Albania Credit
Home›Albania Credit›Meeting of the Financial Stability Advisory Group, December 29, 2021

Meeting of the Financial Stability Advisory Group, December 29, 2021

By Blake G. Keller
December 30, 2021
0
0


FALBANIAN REPUBLIC

FINANCIAL STABILITY ADVISORY GROUP

Tirana, 12/30. 2021

PRESS RELEASE

Meeting of the Financial Stability Advisory Group

December 29, 2021

————————————————– ————————————————– —

The Financial Stability Advisory Group (FSAG) met on December 29, 2021. The meeting was chaired by the Minister of Finance and Economy, in the presence of the Governor of the Bank of Albania (BoA), Chairman of the Board of Directors of the Financial Supervisory Authority (FSA), Managing Director of the FSA, Managing Director of the Deposit Insurance Agency (DIA), as well as other representatives of these institutions.

The agenda focused on the most recent assessments by the current authorities on developments in the institutions and markets they oversee.

In its presentation focused on the assessment of the financial situation of the banking system in 2021, the Bank of Albania stressed that the developments were positive and reflected the resilience of the economy in the face of the impact of the pandemic. Financial markets performed well, with interest rates remaining low and not very volatile. The banking sector has considerably developed its activity, thanks to a strong growth in deposits which have been directed towards interbank investments, securities and loans. Non-performing loans fell to around ALL 41 billion, causing the non-performing loan ratio to drop to 6.2 percent in November 2021. Strong credit growth also contributed to the decline in the non-performing loan ratio. Market risk indicators did not show any pronounced changes during the year. The banking sector’s resilience to risks is assessed as strong, because the liquidity situation is very good and the banking activity is profitable and well capitalized. The continued improvement in credit quality, months after the expiry of the Bank of Albania’s regulatory support measures, is encouraging. Despite this, in 2022 the Bank of Albania will pay special attention to the analysis of non-performing loans through dedicated supervisory actions in the banking sector.

As part of the analysis of systemic risks related to the structure of the economy, the Bank of Albania presented an analysis built on the national financial accounts and the interconnection between institutional sectors. The Albanian economy has a net debt position to the rest of the world, as liabilities are greater than assets. This position is affected by the negative net positions of non-financial corporations (businesses) and general government, while the positions of

1

households and financial corporations made a positive contribution. On the basis of this structure and by evaluating the financing flows between sectors, indicators highlighting the risks linked to the position of certain sectors can be constructed. In addition, in order to control these risks, measures within the framework of economic and financial policies can be taken to reduce the negative net positions. The Bank of Albania performs this analysis not only for the institutional sectors of the economy, but also for the main segments of the financial system. In this context, the members of the FSAG considered that inter-institutional collaboration to this end would be very useful.

Excessive use of foreign currency in the economy, frequently as a means of payment, remains a major source of financial risk and reduces the effectiveness of economic and financial policies. For this reason, FSAG members discussed the need and the possibility that measures to reduce the use of foreign currencies and strengthen the use of national currency, currently concentrated in the banking sector, also be considered. with care for the real sector of the economy. In this regard, the members of this meeting are committed to institutional collaboration, which can also be helped by the expertise sought from international financial institutions.

The FSA briefed the members of the FSAG on developments in the legal and regulatory framework, as well as the performance of the financial markets it oversees. As part of strengthening convergence with the best standards in this area, FSA representatives highlighted the approval of some important laws, including: “on compulsory insurance in the transport sector”; “In the capital markets”; “On collective investment undertakings”; “In financial markets based on distributed ledger technology”; and the preparation of the bill “On private pension funds”. Work on drafting the relevant statutes has progressed. The presentation highlighted the evolution of voluntary pension funds, investment funds and the retail securities market. In the latter, transactions between households and the preference for short-term government debt securities dominate. Regarding the insurance market, the representatives of the FSA underlined the increase in gross premiums paid during the year but also the faster growth of indemnities. Compulsory auto insurance dominates the market structure, having the highest share in gross written premiums. Overall, these segments of the financial markets have demonstrated resilience and strong business growth despite the impact of the pandemic. In addition, FSAG members discussed issues related to inter-institutional collaboration to improve the functioning of these markets.

DIA representatives regularly attend FSAG meetings. During this meeting, representatives of the DIA presented the performance of deposits in banks and savings and credit associations (SLA). Over 2021, insured deposits increased both in banks and in SLAs. Overall, household savings continue to dominate insurable deposits, with foreign currency deposits accounting for just over half of these. By maturity, term deposits dominate insurable household deposits, while deposits from entrepreneurs and trading companies are concentrated in current accounts. In line with the performance of insured deposits, the deposit guarantee fund is up compared to the previous year. The payments of deposit insurance premiums by banks and SLAs as well as the management of financial assets by the DIA constituted the source of financing of the insurance fund during the previous year, as provided for by law in normal situations. In view of the pandemic conditions and taking a cautious approach, DIA reinforced these sources with the line of credit made available by the European Bank for Reconstruction and Development and guaranteed by the government of the Republic of Albania.

2

After the discussions on the issues set out above, the senior officials of the institutions positively assessed the developments in the financial system, financial markets and the relevant regulatory framework, affirming the stability of the financial system. The pandemic has not affected this stability. They stressed the importance of monitoring financial developments, as the economic situation and public health face ongoing challenges.

At the end of the discussions according to the agenda, the senior officials representing the participating institutions approved this press release and authorized its publication.

3

Warning

AFSA – Albanian Financial Supervisory Authority published this content on December 30, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on December 30, 2021 03:56:08 PM UTC.

Public now 2021


Related posts:

  1. Man jumps through car window to stop reckless driver
  2. Tight race in the Albanian parliamentary vote
  3. Balkans rocked as leaked memo explores ethnic redefinition of Bosnia’s borders
  4. Albania’s Unum festival ‘100% guaranteed to move forward’ in June
Tagsinterest rates

Recent Posts

  • Corruption reigns supreme among EU candidates from the Western Balkans – EURACTIV.com
  • Perpetual travel with tourist visas
  • Necklaces: The increase in the prices of building materials and utilities, as well as measures to align with ESG requirements
  • IHG Hotels & Resorts signs InterContinental Tirana – a first brand in Albania – 2022 – News & Media – Press room
  • Head-to-head record: Domino’s Pizza Group (OTCMKTS:DPUKY) vs. Marui Group (OTCMKTS:MAURY)

Archives

  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • January 2021
  • December 2020
  • November 2020

Categories

  • Albania Credit
  • Albania Economy
  • Albania Lending
  • Albania Real Estate
  • Loans
  • Terms and Conditions
  • Privacy Policy