PRESS RELEASE
Governor Sejko presents the Annual Report of the Bank of Albania 2016 to the Parliamentary Committee on Economy and Finance

Today, on 2 May 2017, the Governor of the Bank of Albania, Mr Gent Sejko presented the Annual Report of the Bank of Albania 2016 to the Parliamentary Committee on Economy and Finance.

Reporting to the Parliament is a legal obligation in terms of the institution’s accountability for the previous fiscal year, and informing the lawmakers on the main objectives that will guide the institution's activity in the periods ahead.

At the beginning of his introductory statement, Governor Sejko underlined that the activity of the Bank of Albania in 2016 has aimed at successfully fulfilling its objectives stemming from the Law "On the Bank of Albania", as well as all the other obligations arising from relevant by-laws, and commitments with our international partners

Year 2016 was very important with regard to perfecting institutional governance. During the year, the decisions of the Supervisory Council were thoroughly communicated, , with particular emphasis on the measures taken for the strengthening of institutional governance and for the organizational, structural, financial and technological improvement at the Bank of Albania. Governor Sejko also focused on the contribution that the Bank of Albania has given for maintaining the macroeconomic and financial stability of Albania, as well as for further development and consolidation of financial markets. “... We have initiated a set of policies, measures and legal and regulatory amendments, which have contributed substantially in addressing macroeconomic imbalances, bolstering economic activity, enhancing financial stability, and promoting Albania's European integration process” - Governor Sejko Said

He emphasized that the accommodative monetary policy has contributed to strengthening economic growth and creating the necessary conditions for maintaining price stability. The governor added that despite the positive trends, the economic and financial environment during 2016 has been challenging to monetary policy. However, it reacted with determination and guaranteed an economic and financial environment with low interest rates amid ample liquidity.

Further on, Governor Sejko said that attributable to the Bank of Albania research work during 2016, the functioning of the monetary policy pass through mechanism, and factors contributing to or preventing it are analysed. In this context, he pointed out that the Bank of Albania has identified two main obstacles in the monetary policy pass through mechanism, whose solution requires broader-scale cooperation. The first obstacle relates to the high level of non-performing loans. A national action plan for reducing non-performing loans has been drafted, and is currently underway.. The second obstacle relates to the level of euroisation in the economy. Preparing a plan for reducing euroisation in our economy is a joint commitment by a number of authorities and the Bank of Albania is in the process of identifying measures that may be undertaken in this regard.

Also, Governor Sejko focused on one of the Bank of Albania's institutional tasks such as maintaining the country's financial stability and addressing the potential risks that may jeopardise it. The Governor highlighted that the main financial indicators of banking sector soundness - capitalization, liquidity and profitability - show it has full capacity to withstand operational risks under normal conditions, as well as good resilience against shocks. Meanwhile, the Governor stated that the credit risk is the main risk to which the banking sector is exposed and therefore, the reduction of non-performing loans and creation of stimuli to boost sound lending has been and remains one of BoA’s priorities. The main objectives on which the short and medium-term activities of the Bank of Albania will focus in 2017 and beyond were presented in the report. Price stability, banking system soundness, credit boosting, market liquidity supply, promotion of the use of the national currency, reducing non-performing loans, implementation of best practices of supervision, strengthening governance, increasing transparency and communication with Parliament, state institutions and strategic partners of the Bank, will be the key activities for the periods ahead.

On behalf of the Parliamentary Committee on Economy and Finance, Mr Anastas Angjeli spoke on the activity of the Bank of Albania during 2016, overall commending the work of the Bank of Albania for safeguarding the macroeconomic and financial stability in Albania. He also focused on the internal governance and the fulfilment of the institutional objectives in accordance with the last year’s resolution of the Parliament. In the end, Mr Angjeli underlined the challenges faced by the Bank of Albania, noting the recommendations of the Committee on Economy and Finance for the improvement of Bank of Albania’s activity and increasing its contribution to supporting the Albanian economy.

Governor’s statement to the Parliamentary Committee on Economy and Finance