PRESS RELEASE
Meeting of the Supervisory Council of the Bank of Albania

The Supervisory Council of the Bank of Albania, in its meeting dated February 9, 2005, after treating the proposal of the Supervision Department of the Bank of Albania, decided to approve:

1. The document "On banking supervision mission"

The supervision function is carried out by the Bank of Albania, as a central bank, pursuant to Law "On the Bank of Albania" No. 8269, dated 23.12.1997 and Law " On Banks in the Republic of Albania" No . 8365, dated 02.07.1998.

Supervision mission

The Bank of Albania, in implementation of legal responsibilities as the supervisory authority of banks and other entities performing financial operations licensed by it, aims at:

• Ensuring a sound banking activity in full harmony with/and in implementation of the relevant legal and regulatory framework, with the purpose to prevent financial crises and to protect depositors
• Maintaining stability of the banking system and further, monitoring market developments and recommending necessary measures, so that banks be adjusted to these developments and be managed continuously according to best principles
• Enhancing public trust to banking system and promoting market discipline, requiring enhancement of banking system transparency
• Impacting on the development of fair competition in banking system and further, ensuring equal transparency of licensed entities and their clients
• Offering a constant professional communication to financial market operators and other institutions that impact on the Bank of Albania's activity, in the framework of improving the functioning of financial market and its operators

The Bank of Albania will carry out its supervision function through:

• Constant building and improvement of the regulatory supervision authority, so that it is in harmony with the best international principles that are applicable in practice
• On site inspections and analysis of licensed institutions' indicators, and undertaking of corrective operations for sorting out various problems
• Orientation of the supervisory process to risk identification the licensed institutions are faced with, reccommending relevant solutions
• Setting up politics that aim to orientate the banking system to desired developments
• Cooperation with financial institutions that supervise, with other financial institutions within the country as well as with supervisory authorities of other countries
• Constant improvement of supervisory capacities

In implementation of the requirements of supervisory function, the Bank of Albania will aim to increase integrity levels, professionalism, efficiency and transparency.

2. Granting preliminary license to the proposed "Union Bank" joint-stock company, to perform banking activity in the Republic of Albania

Based on the conclusions of the Supervision Department of the Bank of Albania that the "Union Bank" joint-stock company meets all the requirements of Law No. 8365, dated 02.07.1998 "On Banks in the Republic of Albania" and requirements of regulations issued by the Bank of Albania, pursuant to Law No. 8269, dated 23.12.1997 "On the Bank of Albania", the Supervisory Council of the Bank of Albania approved the: "Granting of preliminary license to perform banking activity in the Republic of Albania, to the proposed "Union Bank" joint-stock company".

The activity scope of the Union Bank, an association whose formation is under process, will be in compliance with the Law "On Banks in the Republic of Albania" and with the license granted by the Bank of Albania.

3. Standard contract for repurchase and reverse repurchase agreements for securities

In the framework of improvements of monetary policy instruments and their approximation to standards of the ECB, the Supervisory Council of the Bank of Albania approved the "Standard contract for repurchase and reverse repurchase agreements for securities". This contract that will be concluded between the Bank of Albania and commercial banks stipulates the rights and obligations of parties in the process of implementing monetary instruments. Also, the drafting and approval of the standard contract for repurchase and reverse repurchase agreements for securities is also a contribution to establishment of interbank market, particularly in terms of encouraging the collateralized lending.

The standard contract for repurchase and reverse repurchase agreements for securities will be completely published in the Official Bulletin of the Bank of Albania.

4. In this meeting of the Supervisory Council, some improvements were also made to the Regulation "On granting credit to the Bank of Albania's employees for housing and improvement of their living conditions", and the realization of procurements of the Bank of Albania for 2004 were analyzed.