Our post-crisis regulatory framework points towards a stronger banking sector, based on a more solid capital foundation that ultimately serves to protect deposits and taxpayers’ money. In this perspective, the Bank of Albania has reinforced banks’ capital position with higher requirements for core capital and is developing new demands for macro-prudential buffers, to build up the lossabsorbing capacity of banks in case of financial crisis. Moreover, the financial safety net already in place was further strengthened with a new mandate for the Bank of Albania as the resolution authority. A transposition of the BRRD, the new resolution law empowers the Bank of Albania with the necessary tools and instruments to resolve failing banks, with no eventual impact on financial stability. Nevertheless, going back to the important lessons of the crisis, these efforts would be insufficient unless undertaken in coordination with all the relevant institutions and players of the crisis management platform. Clearly, effective crisis management requires ongoing communication and coordination among: supervisors and resolution authorities, financial market authorities, deposit insurers and the government. The Financial Stability Advisory Group (FSAG) is assigned with the important role of assisting in safeguarding financial market stability in the Republic of Albania. The FSAG was established in 2006 and comprises the Ministry of Finance and Economy, the Bank of Albania, the Albanian Financial Supervisory Authority and the Albanian Deposit Insurance Agency.

Such examples include: establishing new deposit insurance systems and enhancing existing ones and contributing to safeguarding the stability of financial systems, by promoting international cooperation and encouraging wide international contact among deposit insurers and other interested parties. All these efforts have helped our deposit insurance scheme grow. Since the inception of the ADIA, the Bank of Albania has been strategically committed to creating and maintaining an efficient and effective deposit insurance scheme in Albania. From the beginning, one of the Bank of Albania’s responsibilities has been to develop a stable and safe banking system. Its efforts towards the new architecture of the banking sector – guided by international standards and consumer protection principles, and in coordination with government – have helped in setting up the Albanian Deposit Insurance Agency. The Parliament approved the ADIA law in 2002 to restore public confidence in the nation’s banking system. The Bank of Albania, by law, is the supervisory authority of the ADIA. The role played by deposit insurers is essential in crisis prevention and management, as already proved by the experience during the global financial crisis. This role has proactively evolved towards mitigating financial system vulnerabilities even in the absence of deposit runs or banks in default. It is now a fact that deposit guarantee schemes mitigated the recent financial crisis, using every possible instrument available to them, such as: increasing the deposits coverage limit; expanding the scope of the guarantee scheme; and providing faster deposit pay-outs or even liquidity support.