PRESS RELEASE
Questions and answers at the Governor's press conference on 6 April 2016

Question: You said that the Bank of Albania is ready to do anything if other disinflationary pressures materialize. Are you considering only conventional measures, that is further easing by lowering the key interest rate or other measures beyond the conventional ones? Are you taking such measures into consideration?

Governor: As we have noted in previous statements, so far, the Bank of Albania has followed a conventional monetary policy through lowering the key interest rate. Also, today we decided to narrow the corridor for the overnight deposit facility and overnight lending facility in order to perfect the pass through of the monetary policy easing.

This issue was discussed recently in the Parliamentary Committee on Economy and Finance. We have noted that there is additional space for us to continue with the conventional monetary policy, based on these criteria and some economic and macroeconomic parameters, although the key interest rate currently stands at the historic low levels.

The levels of interest rates of other central banks in the regional and euro area countries are below our rate. We expect the monetary policy to boost the lending and economic activity in general. We believe the effect has been transmitted in interest rates on loans, as corroborated by the increase in lek loans, vis-à-vis foreign currency loans. This effect has also contributed to the growth of consumption and investment.

We measure and monitor a series of parameters and indicators, on monthly and quarterly basis. Like other central banks, the Bank of Albania may consider adopting non-conventional methods should our monetary policy with its conventional measures not produce a positive impact on the expected levels for economic growth, lending and other macroeconomic parameters. This is a common practice in recent years, implemented in the region and beyond.

The European Central Bank lowered the key interest rate event to negative levels. Practically, this is not our case. Generally, non-conventional methods are applied in near recession situations, when the economic growth rate is zero or below zero, in a deflationary situation, when facing shortfall of liquidity and of other elements. Currently, we are not facing such a situation in Albania.

The Albanian banking system has ample liquidity, that is the credit-deposit ratio remains high, and economic growth for this year is estimated at 2.7%. Moreover, our expectations are positive for further economic growth. The figures, facts, and indicators sustain the continuation of the current stance of the monetary policy easing.

  Question: A big problem that has emerged recently in the media is the list of some famous people with secret bank accounts in Panama. It was revealed just yesterday that the Albanian concession companies do not submit their financial statements in Albania; they perform transactions leaving no trace and the Albanian state seems to be unable to track them down. Does the Bank of Albania have a role in this and does it have information about these companies' transactions? Where does these companies' money end up?

Governor: This is a rather broad question and the phenomenon has become an international concern. Dubbed as the Panama Papers this is one of the most sensational international news regarding a massive leak of documents about financial accounts of many companies and personalities. Around the globe, many allegations are made about a variety of prominent figures, rendering this an international problem, much greater than the problem in Albania.

Irrespective of whether names have been mentioned in Albania or not, I would like to emphasise that any fact related to tax evasion or concealment of income should be treated in accordance with the legal framework. If information that the law is breached is substantiated, then it becomes an issue of concern for the prosecution and the prosecution will have to undoubtedly act in respect of the law.

Regarding your question, in concrete terms, the Bank of Albania has always affirmed its stance against informality. We have exerted our regulatory role in relation to banks and other financial institutions we license, so that they do not use two sets for financial statement reporting. As previously noted, the financial statements of banks  licensed by the Bank of Albania are certified and supervised by both chartered accountants and the central bank, as the regulator. This phenomenon has not been found on any of the banks' balance sheets and the banking sector appears not to be involved in transactions or concealment of income or two sets of financial statements.

On the other hand, banks have exerted all their authority and legal power in respect of the law in relation to their clients. Banks, in accordance with the Law, have reported regularly to the General Directorate for the Prevention of Money Laundering. Also, banks are subject to periodic audits and examinations, by the Bank of Albania as well as by the aforesaid authority.

In conclusion, once again I clarify that we do not have adequate information in order to give further details, except what has been made public by the press. As I mentioned at the beginning, this is massive information of international concern, and does not pertain only to Albania. Of course, beside the buzz in the international press, we remain vigilant and stand ready to exert our functions and the legal authority and use this event to help us intensify the fight against informality. 

Governor Sejko: Statement to the Press Conference on the Monetary Policy Decision of the Supervisory Council, 6 April 2016