PRESS RELEASE
Governor Sejko presents the Annual Report 2017 to the Parliamentary Committee on Economy and Finance

Today, on 10 April 2018, the Governor of the Bank of Albania, Mr Gent Sejko presented the Annual Report of the Bank of Albania 2017 to the Parliamentary Committee on Economy and Finance.

Reporting to the Parliament is a legal obligation for the institutions' accountability. The Report informs the members of parliament on the developments in the last fiscal year and introduces them with the main objectives that will guide the institution's activity in the period ahead.

Governor Sejko highlighted that the Bank of Albania has paid particular attention to the implementation of the recommendations left by the Committee in the Resolution “On the assessment of the activity of the Bank of Albania for 2016”.

Further, he presented the country's economic and financial framework, stressing that 2017 was a year of progress for the Albanian economy and financial system.

More concretely, the Governor focused on the Bank of Albania's contribution to improving the economic and financial environment by: implementing an accommodative monetary policy that supported the growth of the economy, and increase in employment, wages and inflation; prudent supervision and proactive approach to banking regulation, helping to improve the indicators of the banking system activity; increase the security of the banking system through the establishment of specialized structures to manage as necessary the resolution and recovery of banks facing solvency difficulties; promoting the development and efficient functioning of the payment system; promoting financial education; further fostering the institutional capacities of the central bank, through continued investment for enhancing professionalism, independence, accountability and transparency; as well through cooperation and exchange of information and opinions with internal and external partners.

The accommodative monetary policy implemented in 2017 has been an important factor in supporting the economic activity in the country. It has guaranteed a financial and economic environment with low interest rates, amid ample liquidity. The coordination of the monetary policy with the fiscal policy is vital for strengthening the macroeconomic stability and ensuring sustainable growth.

Also, Governor Sejko added that the monetary policy pass-through to the financial markets and the Albanian economy - or otherwise the transmission mechanism - continues to suffer from three structural obstacles for which the Bank of Albania has taken its measures:

1. The first obstacle is the relatively high level of the euroization in the Albanian financial markets and economy.
2. The second obstacle is the still-low appetite of banks to expand lending. 
3. The third obstacle is the development level of financial markets and the narrow range of financial instruments.

The governor also paid particular attention to the Bank of Albania's activity in terms of maintaining and promoting financial stability, aiming to strengthen the stability of the banking system, increase its resilience to shocks and adoption of the international standards.

Banking system activity was stable and supported the safeguarding of the financial stability during 2017. The main financial indicators of the banking sector activity improved, while the net financial result of the banking sector grew considerably during 2017. In particular, credit risk fell considerably during 2017, as shown by the decrease of non-performing loans. 

Governor Sejko added that despite the positive developments, the Bank of Albania continued to further improve its supervisory and regulatory framework capacities.

With the assistance of the World Bank and International Monetary Fund, a regulatory framework aiming to encourage the collaboration and coordination of banks in addressing the common borrowers, is being compiled.

The Governor also discussed about the implementation of the Law "On Recovery and Resolution in Banks in the Republic of Albania", which recognizes the Bank of Albania as the Resolution Authority for banks and branches of foreign banks exercising their activities in Albania, as another step towards adopting European standards in the regulatory framework of the Bank of Albania.

Concluding, the Governor answered questions asked by members of the Parliamentary Committee on Economy and Finance.

On behalf of the Committee, Mr Anastas Angjeli commented on the work of the Bank of Albania in 2017. He commended the Bank for its work for safeguarding the macroeconomic and financial stability in Albania, the improvement in the internal governance, and the fulfilment of the institutional objectives in accordance with the last year’s Resolution of the Parliament.

In the end, Mr Angjeli emphasized the challenges faced by the Bank of Albania, noting the recommendations of the Committee.

• Governor Sejko address to the Parliamentary Committee on Economy and Finance presenting the Annual Report of the Bank of Albania