Bank of Albania in the 6th Workshop on Resolution Planning

Publication date: 02.11.2023


On 30 October 2023, the Second Deputy Governor of the Bank of Albania, Ms Natasha Ahmetaj, accompanied by the Head of Resolution Department, Ms Vasilika Kota, attended the 6th Workshop on Resolution planning and meeting the MREL [1]requirements, organised by the European Bank for Reconstruction and Development (EBRD) and Raiffeisen Bank International. This annual forum takes place under Vienna Initiative umbrella and brings together in a joint discussion table the European regulatory authorities and those in Balkans. Also, representatives from finance areas and investors in financial markets engaged in financing the MREL instruments attended this workshop.

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The format of the Workshop consisted in a number panels in which participants discussed on the latest legislative developments in the resolution field, the positive developments in both Europe and Balkan ,in view of meeting the MREL requirements and investors’ expectations in the market for funding financial securities, which meet the new regulatory framework.

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In the panel with representatives from the Single Resolution Board and the resolution authorities from Croatia, the Czech Republic, Austria, Poland and Romania, Ms. Kota introduced the steps taken by the Bank of Albania to establish a successful resolution regime that guarantees the safeguarding of financial stability, being the forerunner of this process in the Balkans. In the framework of the European Union integration process, Albania is the first country in Balkans that has transposed the European Directive on the Recovery and Resolution and has also built the complete regulatory framework that accompanies it.

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In her address in this panel, Ms Kota presented the commitments undertaken by the Bank of Albania in successfully fulfilling the new regulatory requirements for MREL from the banking sector, as well as the challenges posed in view of the approximation with the European framework in Albania. In particular, discussions in this panel focused on the evaluations of the Bank of Albania on the need to adapt the resolution planning with the lessons that the global regulatory framework benefited from the experience of implementing resolution instruments in the most recent crises in some banks across Europe and the USA.

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This year, during the proceedings in this forum, the discussion on the success of the banking sector in Albania to sign, for the first time, financial titles for the purposes of MREL, with professional investors of financial market, such as the EBRD and the OPEC Fund for International Development, took a special place. This issuance of the first financial security, which is the first one in the Balkans, fully underwritten by international financial market investors, reflects their confidence in the banking sector in Albania and the special recognition of the important contribution attributable to the approximation of the European regulatory framework performed by the Bank of Albania. This investment aims to serve as a catalyst to increase the interest of other investors in the financing of securities for MREL, which are also accompanied by elements of supporting the comprehensive strategy of the EBRD for a sustainable and green economy, in line with the strategy recently approved by the Bank of Albania for the management and supervision of climate-related financial risks in the financial sector.

The Deputy Governor Ahmetaj, invited to the occasion ceremony for the signing of the financial instrument, provided and overview of the continuous commitment of the banking sector for successfully overcoming the challenges to meet the regulatory requirements, at the same standard as the large European banking groups. In particular, the Deputy Governor highlighted the importance of this commitment to guarantee a sound banking system, able to withstand any shock and fully prepared to make a significant contribution to the economic development of Albania.

The EBRD and the OPEC Fund representatives commended the continuous strengthening of the regulatory framework in Albania, which serves as a prerequisite for attracting important investors to the country. In particular, they praised the achievements of the Bank of Albania for the design and implementation of a professional regime in the field of resolution, capable of preserving the best European standards.

[1] MREL (Minimum Requirement for Eligible Liabilities) is a regulatory requirement imposed on banks and financial institutions under the resolution authorities along with the prudential minimum capital requirements.