PRESS RELEASE
Meeting of the Governor of the Bank of Albania, Mr. Ardian Fullani with the Governor of the Bundesbank of the Federal Republic of Germany, Prof. Weber and with senior officials of the KFW, the German Bank for Development, and GTZ

During the first week of May 2005, the Governor of the Bank of Albania, Mr. Ardian Fullani participated in a number of meetings in Frankfurt of Germany.

The meeting with the Central Bank's Governor, Prof. Weber and two members of the Bank's Board of Directors was organized in a spirit of hospitality and cooperation for the future.

Prof. Weber stated that Albania is a country that has made headway in economic and particularly banking development reforms, but it still has much to do in structural reforms. The financial and banking market development in the country was discussed at length, particularly as concerns to lending to economy and increasing banking products. In this context, special importance is assigned to banking supervision at the central bank. Banking system and credit growth and development require the raising of banking supervision into a higher level so as to precede any kind of situation.

Mr. Fullani emphasized that under the current situation, special importance will be given to payment system, so that payments are effected through banks. Therefore, it is important to set up the payments infrastructure, a process in which the Bank of Albania plays a primary role. Simultaneously the cooperation between banks and business has to be further encouraged. Also it is important to create all preconditions and respective facilities to public at large, so as to invite it to the banking system for using banking services in everyday life. In this sense, increasing the range and variety of banking products and the presence of the banking system in the whole country become indispensable. The banking system must be present in every cell of the country's life, providing banking services at an as competitive cost as possible to the population.

During the meeting, ideas were exchanged on the use of credit cards and there was accepted that the development of credit cards remains a very effective tool for encouraging the use of payments and for reducing informal economy.

As concerns to financial system, there was stressed that all preconditions should be created as an indispensability for the country's economic growth and development. Special importance is given to the opening of markets and restructuring of financial and lending companies, through regulating the legal basis so as to turn these institutions into genuine financial institutions supervised by the central bank.

Also, the growth and extension of T-bills market and the participation of banks in primary and secondary market will make this market more efficient, more useful and will open premises for urging the financial intermediation role. In this way, we will have more competition, more banking products and undoubtedly the transmission mechanism of monetary policy will be more effective.

Special importance in the discussion was given to statistics and researches. The idea is to produce clear statistics by the central bank itself, serving as a basis for considering policies it drafts. This implies that besides further consolidation of monetary and financial statistics, the Bank of Albania should start to plan the establishment of real economy statistics, including even statistical methods, such as surveys.

The Governor Fullani was supported by the Governor Weber in the idea that the Bank of Albania branches must be transformed into powerful centers of statistical information for the whole region where they operate. This would enable the Bank of Albania to have a clearer image, not only for the overall economic development but also for specific local and regional development trends.

In this context, researches take a primary role. Researches must be completely efficient, applicable and involved in everyday life of the Bank of Albania in terms of organizational structure. Also the research should precede economic developments; it should be the main feeding ground for decision-making process, mainly through increasing the predicting power in terms of future economic-financial developments of the country.

An important issue of discussion, on which ideas were exchanged, was the further improvement of the Bank of Albania's management. It was deemed that at present the Bank of Albania, besides improving the legal basis of banking supervision, it must consider with priority even the improvements in management. This would enable further consolidation of the Bank of Albania and the making of its monetary policy decision-making as effective and as transparent as possible.

Prof. Weber supported the initiative of the Governor Fullani for organizing an open forum in December of the current year, where management issues of the Bank of Albania in compliance with European integration of the country will be discussed. Given the importance of these issues, Prof. Weber stated that these are big challenges and he was committed, in cooperation with the ECB and the European Commission, to support these developments, being regarded as a long-term potential partner.

Another issue of focus was even the regional cooperation. The fact that there exists a number of countries with more or less the same chances, the same distances in time from integration with the EU, makes large cooperation between the main institutions of these countries indispensable.

In technical level, the meetings of some officials of the Bank of Albania were made concrete by making steps towards cooperating and offering technical assistance in twinning level of the Bank of Albania and the Bundesbank in the future.

During other meetings with senior officials of KFW (German Bank for Development) and GTZ (Technical German Cooperation), which currently has a project with the Bank of Albania in terms of approximating it to the European System of Central Banks, discussions were made in terms of technical assistance and simultaneously in terms of developing the banking and financial sector with assistance in legislation area.

Assistance by KFW will be further extended in the banking system for the consolidation of banking institutions and for creating a possibility for long-term funds in the future.