To address the pressing issues facing home and host country relations in this context, the Vienna Initiative was relaunched as “The Vienna Initiative II”. It focuses on fostering homehost authority coordination to support stable cross-border banking, and help protect the economy from disorderly deleveraging. As a member of the Steering Committee of the Vienna Initiative II, I have underlined the need for a more effective home-host coordination, promoting Albania’s position as a host country. Given the geographical proximity and high exposure to recent developments in the EU  BIS central bankers’ speeches  1  financial markets, I am confident that our countries would significantly benefit from developing a regional perspective on risks and opportunities arising from such developments, and major supervisory reforms at the regional level. In this context, Albania’s membership in the Steering Committee of the Vienna Initiative, and the Working Group on Banking Union and Emerging Europe is a solid foundation to build upon and synthesize the common concerns of our countries vis-á-vis EU authorities. Allow me now to summarize the insofar position of the Bank of Albania, articulated in the framework of the Vienna Initiative II, and propose a number of discussion topics, which I am confident will lead to a fruitful exchange of views today. The Bank of Albania has called for effective mechanisms to restore healthy lending to the economies of non-EU countries, where systemic subsidiaries of EU banking groups operate. In this context, EU authorities and EU banking groups should provide their active contribution.

This is not merely a short-term objective, but rather an important anchor for the region’s economic recovery with significant effects on both the economies of the region and the banking groups, which have declared their commitment to our region. We are currently witnessing a period of massive reforms in the EU supervisory architecture, with the establishment of the Banking Union. These reforms correspond to the reactivation of the Vienna Initiative II, hence providing a great opportunity to convey our relevant views as host countries to EU authorities. To support the Steering Committee of the Vienna Initiative, a Working Group has been established to take stock of the Banking Union implications, especially on non-member countries. We consider the creation of the Banking Union as both an ambitious challenge, and a great opportunity to lay down the groundwork for better and more coordinated supervision, especially in a cross-border context. The Banking Union shall involve a Single Supervisory Mechanism (SSM) under the guidance of the ECB, charged with supervising systemically important EU banks involved in cross-border operations. The measure is expected to change the coordination framework between home and host supervisors. This means that the insofar relationship of host countries with a number of national supervisory authorities will now be concentrated on bilateral relationships with the SSM in the case of branches or subsidiaries of systemically important EU banks. In this respect, the Bank of Albania has emphasized the need to establish a permanent working relationship with the ECB, and, possibly, appropriate mechanisms to achieve this.