Greeting speech by Dr. Sali Berisha, Prime Minister of the Republic of Albania, at the Bank of Albania 6th International Conference - Regional financial markets and financial stability, Tirana Sheraton Hotel, 30-31 October 2006

Publication date: 30.10.2006


Distinguished Governors,
Honourable Directors of the Banks of the Country, the Region and International Banks,
Honourable Governor Fullani,
Honourable Minister Bode,
Honourable Representatives of the Guest Institutions,

It is a great pleasure for me to greet the proceedings of this conference and to express the concern of the team I lead for the financial sector, its stable development and long-term stability.

As the Prime Minister, I would say that the sustainable economic growth and employment remain two most primary objectives of the economic program of the Albanian government. Albania is, and will continue be characterized by high and stable growth rates and the sustainability of this economic growth remains our task from now onwards.

Our prime objective is to accelerate the economic growth and I firmly believe that Albania can be a country with fast and steady economic growth. It is clear that the financial system development contributes to the rapid and stable economic development. We regard the macroeconomic stability of the country as a fundamental condition for this development. We also conceive stability and especially financial stability as a dynamic process and not as a status quo. The status quo only devours and destroys the developing countries.

On the other hand, I would like to express my appreciation for the idea of treating this problem in a regional context. In the framework of regional integration and cooperation, it is indispensable and imperative not only the joint treatment of economic and institutional cooperation, but also the harmonized development of the financial sector.

The financial system of the region must be in line with the constant changes taking place in the European financial architecture and even broader. Undoubtedly, every step of this process should be made prudentially, since the financial stability is a prerequisite for the financial integration.

The current conditions of the financial system of the countries in the region indicate that in general, the same group of banks operates in the market, and as a consequence, this increases the risk of transmitting the financial system instability from one country to the other.

Therefore, it is important that each country is faced with the weaknesses of its own financial systems and with the indispensability for strengthening the surveillance on these systems, because of the increased demand in these countries, and each country should correct them prior to or during the integration process. The quality and manner of reform implementation in the banking system and in other financial markets should be the main indicators of this delicate process.

Reforms, stability and financial integration are needs for the developing markets and are driven by the market forces themselves. However, the policymakers should facilitate this financial integration, serving as catalysts in this process. We should reduce such obstacles as the legal, regulatory, competitive ones, of fiscal policy, or even technical ones, which the financial institutions may face during their interregional activity. In the regional plan this will be a support for undertaking financial integration reforms according to the unified standards and updated practices.

The process of regional cooperation and integration progresses every day, every week and every month. The regional financial cooperation is a key condition for this process. In this context I would like to re-emphasise that this conference is very important not only for Albania, but for the whole region.

The government has often expressed its full commitment to this process. We are deeply committed to create a reliable climate in Albania, aiming at creating a more attractive environment for foreign investments. Being the executive, right from the beginning of our governance mandate, we showed special care to the fiscal consolidation, reduction of informality and continuation of the financial system consolidation. In the reforms undertaken by the government, priority has been given to the fight against organized crime, corruption and money laundering, and to the launching of new promoting ideas, without leaving behind our major projects on infrastructure.

We have built a constant dialogue with the banking system in Albania. We have attentively listened to its problems and requests. We have drafted many laws and bylaws, aiming at increasing its participation in the economic development of the country. I believe that this dialogue, this partnership is giving results and this system will become a big support to the country's economic development. Its potential is of course much bigger, meaning that the government and the Bank of Albania should seriously analyze it, so that this sector can actively participate in the economic development of the country.

We will soon pass a law on public-private partnership. The banks will have a new large place in the financing of the public sector, but mainly of the private sector, in a country which has an economic growth of almost 6 % but which is not enough to satisfy the needs of this country for its economic development.

Soon the Parliament of Albania will pass the draft-law on the banking law in the Republic of Albania. The amendments to this law are a clear evidence of the reforms undertaken to improve the legal, regulatory and supervisory framework for the banks operating in the country. They aim at supporting the integration process, and directly relate to the implementation of the "National Plan on the Approximation of the Legislation".

Also the consolidation process of other financial institutions is over and the Financial Supervision Authority has started to operate, with the purpose to strengthen the supervision and undertake sound financial reforms.

Personally I am convinced that the country's finances should have a financial board, given the positive tradition of the central bank of the country, but let us consolidate this institution, the supervisory authority of non-bank financial markets, so as to encourage their development. This is crucial for the country, since an undeniable progress exists in some aspects, but in some others we should accept that these markets are really rudimentary.

My presence here is a signal of our full support for the reforms that will bring about long-term economic growth in Albania. I strongly believe that not only Albania, but the whole region which has come out of a phase of conflicts will be transformed into one of the most dynamic regions in the economic level of the European continent. In this context, I firmly believe that such a thing will take place only if its nervous system, i.e., the banking system of the region, operates in a proper way.

In conclusion, I wish successes to this conference.