Decisions of the Supervisory Council of the Bank of Albania, 6 July 2016

Publication date: 06.07.2016


On 6 July 2016, the Supervisory Council of the Bank of Albania, in addition to the decision to leave the key interest rate unchanged at 1.25%, reviewed and decided to:

  • Approve the document 'On operational risk management policy at the Bank of Albania'

In the framework of improving the internal governance, the Bank of Albania started last year a comprehensive project to assess the operational risk related to its day-to-day operations and to establish a complete regulatory framework to manage these risks.

At the conclusion of this project, the Supervisory Council approved the "Operational Risk Management Policy", which aims at establishing and implementing an effective and sustainable framework for the operational risk management at the Bank of Albania, in compliance with the relevant best practices. This document lays down the core principles, purpose/scope of operational risk management at the Bank of Albania, as well as roles and responsibilities of all governing units of the operational risk management structures.

  • Approve the amendments related to the required reserves held at the Bank of Albania by banks

The required reserves serve as an instrument aimed at adjusting the banking system liquidity and stabilizing interest rates in the money market. The required reserves are held in the Albanian lek, euro, and US dollars. The Supervisory Council of the Bank of Albania decides the interest rates for the remuneration of the required reserves.

In the meeting, the Supervisory Council decided that the rate of interest for the remuneration of the euro-denominated required reserves shall be equal to the rate on the deposit facility determined by the European Central Bank, currently standing at -0.40%. Meanwhile, all funds held at the euro reserve account above the euro-denominated required reserve shall be remunerated at the interest rate of 25 basis points lower that then ECB deposit facility.

  • Approve amendments to the Regulation "On reporting to the Bank of Albania according to the Unified Reporting System"

The Unified Reporting System is the main reporting system for commercial banks, through which are met all the requirements for monetary and financial information, monetary policy and banking supervision at the Bank of Albania. For the first time, the reporting of data and information from commercial banks will take place on line, through the electronic reporting platform ERRS (Electronic Regulatory Reporting System), starting from July 2016. In this regard, the Bank of Albania fulfils one of its more important institutional commitments to automating the reporting process of commercial banks.

The introduction of new forms and the improvement of the form and contents of the existing forms are part of the amendments, aiming at the qualitative change with regard to monitoring risks in the framework of banking supervision and increasing the quality of statistics produced by the Bank of Albania in the context of alignment to the international standards.

  • Approve the Regulation 'On authenticity checking and criteria on recirculation of Albanian coins'

This regulation lays down the criteria on the authenticity checking, assessment of fitness for circulation and the recirculation of Albanian coins. The regulation is compiled in accordance with practices of other central banks and in alignment to the best European standards in this field.

  • Approve the Regulation "On the organisation and functioning of the Capital Spending Committee at the Bank of Albania" and the Regulation " On Bank of Albania budgeting"

These decisions aim at improving the financial management and budget planning of the Bank of Albania, in compliance with the objectives set out in the medium-term development strategy of the Bank of Albania.

  • Approve University of Oxford as an external collaborator of the Bank of Albania

Pursuant to this Decision, the Supervisory Council approved the continuation of the cooperation agreement between the Bank of Albania and the University of Oxford. The aim of this cooperation is to strengthen analysing and researching capacities of the Bank of Albania, to enhance the knowledge on political and economic developments and challenges that Albania and South-eastern Europe is facing.

The Supervisory Council was also informed on the day-to-day functional and operational activities of the Bank of Albania.