gent sejko : effectively using remittances sent by albanians abroad address by mr gent sejko, governor of the bank of albania, at the high - level meeting on the remittances from the albanian diaspora, tirana, 11 december 2017. * * * dear minister majko, dear guests, welcome to the premises of the bank of albania! i would like first to thank the minister of state for the diaspora, mr pandeli majko, for his initiative for higher attention to drawing in and effectively using the remittances sent by albanians abroad. today ’ s meeting is the first in a series of common steps to be taken by albanian institutions, in an effort to give its due place to the financial contribution by albanian emigrants to the welfare of their families at home. this contribution is also vital for the sustainable and long - term development of the albanian economy. the bank of albania has always considered the remittances as a very important contributing factor for the economy of albania and beyond. in this light, the bank of albania measures and analyses the available statistics, and conducts non - quantitative assessments related to the geographical distribution of the sources of remittances, at the national and international level. the assessment of factors contributing to the level of remittances and the cyclical volatility of their flows over the years remains at the focus of our work. for albania, remittances represent a steady and considerable source of inflows, which surpass foreign direct investments, being thus a substantial source of financing economic growth in albania. in this regard, the bank of albania considers remittances as an important source of income in the economy and a contributor to the balance of payments. from a narrower perspective, remittances are estimated to have a significant impact on albanian households, for reducing the poverty and improving the quality of life. even in the case of albania, the studies performed by the bank of albania and the world bank show that the income from remittances are allocated mainly for consumption, medication, and education, as well as for savings and investments, the latter mainly for residential properties. in addition to the above, the bank of albania treats remittances also from the perspective of their inflow channels in the albanian economy. recent studies show that the formal transfer channels dominate, mainly through money transfer financial institutions, and less through banks. in the meantime, remittances in cash remain at

most reliable form of liquidity ). the options for investing in foreign securities might be bis central bankers ’ speeches viable, but at the same time it also increases the exposure to foreign exchange risk. some of the countries might opt for the central bank placements as an alternative, but this is also seen as a solution, which increases the cost of liquidity and hence, increases the costs of finance. the problem of limited availability of proper assets also holds for corporate bonds, which should have a proper credit rating and certain liquidity features to qualify for the lcr. this is difficult to be fulfilled in countries with thin financial markets, and with sovereign and hence corporate credit rating usually bellow the basel iii requirement. so measures that restrict banks ability to finance bond holdings may hamper the further development of the local capital markets. one remaining issue is the interaction between the lcr and the provision of central bank facilities ( the basel committee committed to work on this during 2013 ). – the second “ dimension of problems ” arises from the calculation of the nsfr that requires shift from short - term to more stable funding of assets and business activities. banks would have to extend the maturity of funding sources ( long - term securities or extend the maturity of loans ) or convert long - term loans to short - term loans with negative implications for the effects for the growth. extension of the maturity of the funding structure would also imply higher cost of financing. within the emerging markets, the main concerns arise from the mismatch between the funding that is actually being stable in some of the ee ’ s and the funding that is defined as a stable one within the basel iii regulation. some of the examples that we can run through are countries like saudi arabia and south africa, where the deposits of the public sector entities and the wholesale funding are the most stable one, but are not treated as such within the new regulatory framework. the above can be considered as direct impact of transmission of the new liquidity framework to the ee ’ s, but the indirect impact should not be neglected at all. the new liquidity rules will probably change the assets structure in the balance sheets in some of the large banks in the ae ’ s. in a world of rapid financial integration, many of these banks have subsidiaries in the emerging world and if the liquidity is managed on consolidated level, this can imply possible liquidity shortages in the host country. the treatment of intra - bank exposures may pose challenges especially in the emerging markets where banking systems rely