PRESS RELEASE
Regional meeting of the Governor of the Bank of Albania, Mr. Ardian Fullani in Saranda city

On 24 September, 2007 the Governor of the Bank of Albania, Mr. Ardian Fullani held a regional meeting in Saranda with representatives of the local government, banking sector, business community of Saranda, Gjirokastra, Delvina, Tepelena, Përmet, and with representatives of University of Gjirokastra. The meeting is further to an institutional dialogue that the Bank of Albania has recently instituted with various groups of interest.

The Bank of Albania is confident that direct communication with different stakeholders and with the public at large is an important factor for enhancing the decision-making effectiveness in the area of monetary policy and financial stability of the country. Accurate understanding and interpretation of its decisions and signals help in meeting the primary target, i.e., the maintaining of price stability.

In this regular meeting, the Governor of the Bank of Albania, Mr. Ardian Fullani focused on some issues, which have recently occupied a central place in the meetings of the Bank of Albania Supervisory Council.

Consumer price stability constitutes the main priority of the Bank of Albania. Therefore, in his speech, Mr. Fullani stated that "... We remain determined in our efforts to keep inflationary expectations anchored around 3 percent, which constitutes also our numeric target. To this end, we will continue to orient our political and operational decision-making towards the meeting of this target".

Another issue dealt with by the Governor was the further perfection of the financial market, particularly of the banking one. The Albanian banking system is in a sound financial position, capitalised and profitable. The consolidation of the banking system through mergers and acquisitions, aiming at attracting internationally well-known investor with non-contestable experience in banking business is the prevailing philosophy in this regard. Furthermore, Mr. Fullani drew the attention of the banking system for more concentration on the enhancement of the financial market efficiency and better risk management.

The Bank of Albania assesses that there has been progress in the overall financial market performance, though the current challenges impose the need for further reforms. The Bank of Albania remains committed to this direction and "... soon enough, it will come out with a specific package, centred on the efficiency of the financial market, particularly of the banking one. A new law on repurchase agreements, regulatory changes in required reserve maintaining and calculation, rarefaction of Treasury bill auctions from the viewpoint of time, and presentation of the base rate are part of this package" - stated Mr. Fullani.

The development and perfection of the financial market is naturally related to the enhancement of financial stability, a permanent challenge to the Bank of Albania. The entry of new banks has directly impacted on raising the value of the banking business in Albania, significantly increasing the competition among banks, which is reflected particularly in the rapid growth of their loan portfolio. The figures speak for a growth of credit outstanding by 8 percentage points of GDP over three last years, whereas in July its annual growth was above 50 percent, which may account for 28 % of gross domestic product for 2007. Though we have to do with a natural process that associates the banking business, there is still room ".... for an ever rigorous application of all the regulations and respective standards".

In his speech, Mr. Fullani dwelt once more on some issues treated even earlier, such as commercial banks' management, their internal audit, their window services and transparency.

The issues treated in the meeting arouse interesting discussions between the public and the panel. Representatives of the local government presented in their speech the economic projects and infrastructure of their cities. They also evidenced the tourism potential of the region, but also expressed their concern about the lack of funds for the development of tourism. Representatives of the local government and financial community jointly requested the drafting and approval of the law on public borrowing. This law will assist the municipalities in benefiting as much as possible from commercial banks' lending and on the other hand, the latter will be under less risk while extending loans to the local government. In this framework, the Bank of Albania is providing its consultancy for an efficient drafting of the law.

A more sincere communication between commercial banks and the business was requested, inter alia, in the meeting. The businesses should be more transparent about their activities and the banks, notwithstanding the good work done in terms of transparency, should improve the communication with the public in order to achieve the targeted European standards. The participants assessed the meeting as vary valuable not only for the region, but also for the cooperation between the Bank of Albania and the financial community.

During his stay in Saranda, the Governor of the Bank of Albania, Mr. Ardian Fullani paid a visit to the premises of the branch of the Economics Faculty of the University of Tirana. Mr. Fullani dwelled on multiple possibilities for cooperation, highlighting the Bank of Albania's assistance for enriching the library of this faculty and the students' possibility of short-term training programs at the Bank of Albania premises.

Also, in the company of the Mayor of Saranda, Governor Fullani paid visits to some investments in agro-business area of this city. During these meetings Mr. Fullani was closely acquainted with the economic activity of Saranda district.