PRESS RELEASE
Decisions by the Supervisory Council, 1 September 2021

• Approve the Financial Stability Statement and Financial Stability Report for 2021 H1

The Financial Stability Report is an important periodic document prepared by the Bank of Albania whose main purpose is to identify and assess risks to the financial system and its infrastructure. The Financial Stability Statement, whose half-yearly release is a legal requirement set out in the Law “On the Bank of Albania”, prefaces the Report.

The Bank of Albania assesses that in the first half of 2021 (hereinafter, the “period”), the banking sector carried out the activity steadily. Deposits and loans grew, credit quality improved considerably, and the other indicators of the financial system stability remain at adequate levels.  Overall, the exposure of the banking sector to risks appears contained. The improvement of health situation supported a fast recovery of the economic activity. The experience of this period shows that the acceleration of vaccination process remains essential to mitigate uncertainties that the dynamic of the pandemic still has on the future economic and financial developments. At the same time, these uncertainties evidence the need that the economic, financial and prudential policies retain the flexibility elements to react if necessary. Related to the banking sector, it remains crucial to perform regular assessment of the exposure degree to risks, and preserve the proactive approach regarding the measures for mitigating and tackling these risks.  In this regard, the Bank of Albania remains ready to take all necessary actions pursuant to the law, to support the banking activity and contribute to the stability of the financial system.

Amid the main indicators of the banking activity, the report evidences the improvement of credit quality, whereas the non-performing loans ratio fell by 1 percentage point, during the period, at 7.12% (in July it reduced further, at 7.05%)

The full Financial Stability Report will be published in the coming days on the Bank of Albania's website http://www.bankofalbania.org/.

• Approve some amendments in the Regulation "On Consumer Credit and Mortgage Credit”; and in the Regulation “On the functioning of Credit Registry at the Bank of Albania, and the conditions and procedures on the information, use and revision of data being administered in this Registry”

Amendments in the Regulation “On consumer credit and mortgage credit” aim at providing fair practices in the market related to the interest rate level, late payments, and implemented penalties, particularly from non-bank financial institutions for the consumer credit.

Consequently, there were made some amendments in the Regulation “On the functioning of Credit Registry at the Bank of Albania, and the conditions and procedures on the information, use and revision of data being administered in this Registry”, in line with the above-stated amendments.

• Approve some amendments in the Regulation “On the net stable funding ratio of banks”

The amendments encompass the enclosure of two new annexes which contain the reporting forms and explanatory guidelines to fill them. They serve to calculate the indicator and their reporting at the Bank of Albania in ERRS system.  In addition, the amendments lay down the establishment of a minimum limit on the net stable funding ratio of 100%, including the total significant foreign currencies, in line with the same requirement set forth in the liquidity coverage ratio, also in the traditional liquidity indicators.

• Approve one amendment in the Regulation “On liquidity coverage ratio”

The amendment consists in the revision of the definition “significant currency”, in compliance with the regulatory amendments of EU in 2019, laid down in the EU Regulation 2019/876 (CRR2).

Also, the Supervisory Council reviewed additional information related to the daily operational and functional activities of the Bank of Albania.