ardian fullani : building a sound and efficient albanian banking system opening address by mr ardian fullani, governor of the bank of albania, at the workshop on “ a sound and efficient albanian banking system ; activities and results achieved under the eu - funded twinning project ”, tirana, 04 june 2012. * * * dear participants, the development strategy of the bank of albania provides, inter alia, for the swift approximation of the institutional, legal and operational framework with the best standards of european union ( eu ) central banks, in view of the country ’ s major priority, i. e. accession into the eu. the bank of albania has been engaged in an eu - funded twinning project for strengthening the institutional capacities, particularly in the areas of banking supervision, statistics, payment systems and the implementation of monetary policy, capitalising on the extensive experience and outstanding professionalism of bank of italy and bank of france experts. this project had set challenging objectives, which had to be achieved within a relatively short time. its success depended on the commitment and professionalism of participating institutions, and on their capability to implement a true cooperation. today, i have the pleasure to address this important event, which marks the successful completion of the twinning project after about 18 months of intensive joint work. i would like to thank all the experts that have been working for this project at the bank of italy and bank of france, for their commitment and professionalism. i would like to also thank the representatives of the eu delegation to albania for their support as they monitored the project. the twinning project was implemented in 6 modules as follows : coordination of european integration process financial literacy supervision and financial stability payment systems statistics inter - bank market coordination of the european integration process was implemented with the bank of france and consisted in developing and mastering the required instruments for coordinating the european integration process with a view to preparing meetings at european level and coordinating albania ’ s accession process in the eu. the bank of france provided its experience in organising meetings at european level and administering the process of approximating the banking legislation with the acquis communautaire. financial literacy was implemented with the bank of italy and consisted in drafting a financial education strategy for the public. under this module, our research drew on the european experience and was adapted to albania ’ s needs. in addition, we established a standard for conducting surveys and questionnaires to assess the public ’ s awareness and knowledge on financial literacy and the effectiveness of educational activities. thanks

so that collateral earns its optimum value. bis central bankers ’ speeches in the end, the banking industry should prove that it is active in tackling non - performing loans and releasing resources into the balance sheet to further support the activity. this is the best form to test the real possibilities, which may later be supported by amendments to prudential regulatory framework. our common goal is to stop progression of the value of nonperforming loans and improve the situation gradually. some banks, thanks to their prudent and steady efforts over the past three years in relations with their clients, have managed to significantly reduce the non - performing loans share. they have continued lending to the economy at good levels. organisation and management of their work is an example for other banks. the current legal and regulatory framework is comprehensive and in line with the best international standards, although it may require ongoing improvement. our consolidated opinion, however, is that all the stakeholders need to exhaust all the available tools and gradually make further steps in the legal and institutional framework. more specifically, the banking industry and the business community need to work more closely. i believe there is more space for better understanding and more fruitful cooperation. the business community and the banking system should leave their trenches and cooperate in concrete terms to face future challenges. the banking system is ready to increase its support to the economy with loans. this was confirmed to me in a meeting i had with the management of the largest five banks. personally, i urged the banking system for a more active approach to lending. this is a real challenge and many institutions and groups of interest are involved in it. therefore, i would like to invite all other stakeholders to be open - minded and very cooperative to boost lending to the economy. first, i would suggest to the business community to be more creative, transparent and formal in its operation. it should comply with all obligations arising from the contractual relations with the banking system. this should be broadly understood and accepted. a correction is necessary in the economy, first of all implying a rebalancing of prices. there may be no reduction in non - performing loans, increase in lending to the economy, improvement in business and bank balance sheets, unless collaterals are executed and, subsequently, fix asset prices are corrected. this process would release huge financial resources that would be a vital serum of fresh money injected back into the economy. with this fresh money we must encourage the creation of new and effective initiatives that yield swift return on investment.