PRESS RELEASE
Round table with the banking system on "The economy and banks: present and future challenges"

On 16 September 2015, the Bank of Albania and the Government of Albania, with the participation of the Albanian Association of Banks, organised a round table on "The economy and banks: present and future challenges".

This roundtable followed the financial forum organised in June 2015 with the participation of international financial institutions, IMF and WB.

The round table was attended by Mr Edi Rama, the Prime Minister of the Republic of Albania, Mr Gent Sejko, Governor of the Bank of Albania, Mr Shkëlqim Cani, Minister of Finance, Mr Arben Ahmetaj, Minister of Economic Development, Tourism, Trade and Entrepreneurship, Mr Arben Isaraj, Deputy Minister of Justice, Mr Christian Canacaris, Chairman of the Albanian Association of Banks, as well as executives of commercial banks and representatives of international institutions.

The discussions focused on the dynamics and latest developments in the Albanian economy, especially with regard to the credit performance and on the need to continue inter-institutional cooperation with a view to further reducing non-performing loans.

In his address, Governor Sejko pointed out that "the high level of non-performing loans has not affected the banking sector's stability. Liquidity and capitalisation indicators remain adequate and the financial performance has been positive and improving."

He also focused on the complexity of the non-performing loans issue, whose treatment requires maximum commitment by all the relevant institutions. He added that reducing the level of non-performing loans is vital not only for the banking system but also for the entire economy of Albania. To successfully realise this process, institutional policies need to be well coordinated.

Governor Sejko drew the attention also to the issue of the timely execution of collateral. 'Inadequate legal provisions and their inconsistent implementation in practice render the collateral execution a tedious, uncertain and costly process for the parties involved', Governor Sejko said.

In his address, Prime Minister Rama identified corruption in the courts as the main cause that prevents the reduction of past due loans. He pointed out that protraction of such procedures by courts is becoming an obstacle for credit growth and economic development.

' ...now we are at a crucial stage where we need a significant increase in lending, and where we realistically consider as a strategically very important moment for the near future of our economy, freeing banks from the clutches of corruption of the justice system', PM Rama said.

He promised that the Government will deepen the reforms undertaken across all strategic sectors, to guarantee the necessary conditions for a sustainable economic growth. In this context, the Prime Minister considered the Government's action against informality as very useful for the banking sector as well.

As part of the agreed plan between the relevant institutions, in the near future, the law "On bankruptcy" will be sent to the Parliament, some amendments to the Code of Civil Procedure and to the law "On immovable property registration" will be drafted, and some definitions in the law "On securing charges" will be specified.

The Albanian Association of Banks pointed out in their presentation that, in contrast to many countries in the region, lending to the economy has recorded positive growth rates in Albania. However, the Association acknowledges that the banking system should be more aggressive in terms of lending to help the Albanian economy grow at faster rates.

The Association called for greater support with regard to collateral execution practices, which are often subject to judges and bailiffs subjective interpretation and arbitrariness.

At the end of the discussions, participants agreed they need to continue with inter-institutional consultations at technical level, and then follow up with another high-level meeting.

Click here to read the full address by Governor Sejko

Click here to read the full address by PM Rama