Use of Lek to Reduce Financial Stability Risks

The financial situation of the Albanian banking sector is stable, while credit in the domestic currency and the overall performance of deposits is at good levels. This was declared on Tuesday during the meeting of the Financial Stability Advisory Group (FSAG). The meeting was attended by Minister of Finance Arben Ahmetaj, Governor of the Bank of Albania Gent Sejko, Chair of the Board of the Financial Supervision Authority, Director General of the Deposit Insurance Agency, as well as other representatives from these institutions.

According to the data presented by the representatives of BoA regarding the assessment of financial performance and risks for the banking sector activity, the situation is stable.

The analysis showed that the good levels of capitalization and liquidity in the banking sector provide sufficient protection against banking activity risks.

Therefore, the participants discussed the need to strengthen the upward trend of using the local currency in the Albanian economy and the financial system, as an instrument which improves the effectiveness of the monetary policy transmission mechanism and reduces risks to financial system stability.

“Based on the recommendations of the international financial institutions and of European ones, FSAG suggested the review of other countries’ experience in this regard and the assessment on the actions that could be taken in medium term and in reflection of Albanian economy characteristics,” it was stated in the press release issued by FSAG

Moreover, the participants repeated the importance of monitoring the online trading platforms and of the inter-institutional cooperation, in order for the public to know the risks of investing in these platforms and to only accomplish such investments through licensed and supervised entities.  Furthermore, the participants assessed some concrete aspects of the financial infrastructure which supports the interactions of banks and non-banks financial institutions according to the legal stipulations.

News Source/ Photo Credit: BoA