Meeting with the banking system and business community on Bank - Business relationships: Common economic challenges in face of global Covid-19 pandemic

Publication date: 13.05.2020


On 13 May 2020, the Bank of Albania organised a discussion forum with the banking system and business community on: “Bank - Business relationships: Common economic challenges in face of global pandemic Covid-19”.

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The meeting was initiated and organized under the auspices of Governor Sejko at the premises of the Bank of Albania and aimed at encouraging the collaboration between these two groups of interest, to counter the common economic challenges caused by theCovid-19 pandemic, and providing a platform to share views and needs on the instruments to be employed and the further measures to be taken.  

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The meeting was attended by executives of the banking system, the Union of Chambers of Commerce and Industry of Albania, the National Chamber of Crafts, the American Chamber of Commerce in Albania, Chamber of Commerce and Industry France -Albania, Trade Union of Albania, the Albanian Agribusiness Council, Albanian Constructors Association, the Albanian Tourism Association, the Albanian Association of hydrocarbons, as well as the Albanian Food Industry. 

In his opening address, Governor Sejko stated that the economic activity in 2020 is expected to considerably fall due to the prudential measures undertaken to confine the spread of Covid-19 pandemic. 

In this new reality created by Covid-19, Governor Sejko emphasised that the safeguarding of the economic and financial stability of the country, and the guaranteeing of the economic growth stability in the medium-and long-term period poses a serious challenge, which demands for the harmonisation of actions among all market stakeholders to face it.

The Governor pointed out the importance of measures undertaken by public authorities to tackle this situation, where the two fiscal packages approved by the Government are crucial. They provide a stimulus to boost aggregate demand, mitigate liquidity problems and avoid the long-term implications of the crisis in the economy. The Governor assessed the approval of funds for the sovereign guarantee provided by the Albanian Government to support with bank credit the firms, with the purpose the conduction of monthly wages to their employees and to cover additional needs.  

In parallel, the Bank of Albania has in place important measures to face this situation.  In the capacity of the monetary authority in Albania, the Bank of Albania has made operational a set of important measures which aim to mitigate the negative impacts of the Covid-19 pandemic, on the economy and to establish all the necessary pre-conditions for providing a rapid recovery of the Albanian economy. 

In this regard, Governor Sejko presented the measures undertaken by the Bank of Albania such as: the reduction of policy rate, at its historical minimum of 0.5%; the supply to the banking system in Albania with all the needed liquidity by removing the quantitative limits; the uninterrupted supply of economy with cash; and the extension with three months of the loan instalments to enterprises and households in financial difficulties. 

Notwithstanding the measures taken by public authorities, Governor Sejko stated that firms and banking sector should be more active and collaborative to face the challenges in the future.  In this regard, the Governor highlighted the most important challenges faced by firms and the banking sector in the post-Covid-19 reality.  The new reality will demand for the business to be more realistic in its plans as well as more careful in regard to liquidity management. 

On the other hand, Governor Sejko praised the important contribution that banking sector is providing to the economic development of Albania. In this new reality created by Covid-19 pandemic, he emphasised it is indispensable that banking system finds and maintains a fair equilibrium betting support on borrowers in need - in mutual interest and long-term benefit, without jeopardising the security of citizens’ savings and the financial stability of the country - and maintaining the soundness of the balance sheets .

The safeguarding of the financial stability of the country is related with the soundness of the business and in the conditions created by Covid-19, banks may help clients who are facing serious difficulties through credit restructuring, in the form of another temporary postponing of the loan instalment or in the form of its entire restructuring, always and so far that the long-term perspective of the business remains solid. Governor Sejko stated that the adoption of these decisions should not affect the monetary and financial stability of the country. 

The Chairman of the Albanian Association of Banks, Mr. Silvio Pedrazzi and  the President of the Union of Chambers of Commerce and Industry of Albania, Mrs Ines Muçostepa, praised the measures undertaken by the Bank of Albania and stated their view regarding the economic situation created by Covid-19.

Then, participants continued with the discussions and the exchange of opinions regarding this situation.  At the end of the meeting, all participants praised the meeting as fruitful and stated their commitment to create a common work platform for the following period.