The stability of the financial system is a fundamental condition for the financial system to enhance its efficiency in the intermediating process and to contribute in the orientation of financial sources towards investments in productive projects within acknowledged parameters of the activity risks. In this way, the contribution of the financial system in the country's economic development and in the fulfillment of the needs of its clients is crucial.
In order to achieve and mantain the stability of the financial system, sound financial institutions are needed, which act in a financial market with a developed and monitored infrastructure,where mechanisms which stimulate the effective management of financial sources and risks faced by investors exist.
The central banks play an important role in the achievement and preservation of the stability of the financial system; however such role is not an exclusivity of central banks. The importance of this objective and the diversity and complexity of the combined issues within it, inquire the harmonised efforts among other institutions, especially the supervisory authorities of the banking1 and non-banking financial institutions and the deposit insurance agency. Other institutions that can be included in this framework are those institutions that supervise the development of the competition in the financial market, stimulate and control the adoption and the implementation of different standards, etc.. In the framework of increased openness and the integration of financial markets, the authorities in different countries have considered as necessary the expansion of this cooperation at an international level.
Beyond the main objective of achieving and maintaining the price stability, the Law ” On the Bank of Albania”, no. 8269, date 23.12.1997 (changed), also defines the role of the Bank of Albania, as the central bank of the country, in maintaining the stability of the financial system. On the articles 3, 12, 16, 21 and 69 of this law, Bank of Albania is given the responsibility of licensing and the supervising banking activities, supervising and stimulating the functioning of the payment system, issuing liquidity in the market in the role of the lender of last resort, and publicly communicating the nature and the type of the threats to the stability of the financial system.
1 Refers to cases when banks are not supervised by the central bank, but by another independent institution.