The cooperation programme will be implemented with the support of experts from 11 central banks in the EU, with the ECB being the overall coordinator. Only two years ago, the Bank of Albania successfully concluded a twinning project with two of them: Banca d’Italia and Banque de France. During the six-months of the project implementation period, central banks of the Eurosystem will provide expertise through training, conferences, seminars, study visits and support to strengthen administrative capacities, and regular technical missions. This form of cooperation will aim at fostering the existing relations and building a broader network of cooperation between the Bank of Albania, central banks of the region and the Eurosystem. The Project is funded by the European Commission, in the framework of support policies for the central banks of the Western Balkans, to promote macroeconomic and financial stability in the region. This form of technical assistance has been particularly successful in the past, creating strong institutional ties between the central banks of the Eurosystem and those of our region. The twinning is based on a detailed plan of action for achieving a series of concrete and measurable objectives. This means that upon conclusion of the project, having benefited from the technical assistance, the Bank of Albania will be able to discharge its institutional duties and responsibilities in the relevant fields more effectively and more efficiently. I believe the main factor of success for such technical cooperation programmes is closely related to having clear goals and objectives, set jointly with our European partners.

Benefits of foreign direct investment are manifold ranging from efficiency gains brought about by new technologies to the introduction of innovative products and management techniques. Further, more advanced research and development facilities and adoption of best practices from more matured financial markets will contribute to the transfer of skills and knowledge, adoption of sound risk management culture, technology and ideas in the domestic financial system. Another consideration in the liberalisation process is that of promoting financial inclusion, where all segments of society will have access to adequate financial services. The wide branch network of domestic banking institutions has ensured that non-urban areas have access to banking services, thereby eliminating the use of informal financial services. Domestic banking institutions with large presence in the non-urban areas, some as high as 20% of total branches, have succeeded in achieving sustainable performance while meeting this objective. Locally incorporated foreign banks are however located mainly in major cities and serve only certain segments of the banking public. A wider dispersion of branches of locally-incorporated foreign banks across the country would contribute towards achieving greater financial inclusion. For further expansion outside major cities to be a commercially viable proposition, it is recognised that the attainment of critical mass is essential. In this  6  BIS Review 55/2006  regard, in addition to the flexibility accorded to establish up to four new branches, consideration will be given to allow for greater presence in the non-urban areas and to serve the segments of the economy which are currently underserved.