alban meka

Transcription

alban meka

No. 8 July 2013
Publication of Albanian Association of Banks
OVER REGULATION
Could it lead to overkill?
Bank Cards….
For whatever life has in store!!
The brochure on credit cards and their usage, is part of the Financial Education Campaign, undertaken by
the Albanian Association of Banks and Bank of Albania. For more information visit: www.aab.al
AAB MEMBERS
www.aab.al
No. 8 July 2013
Contents
publication of the Albanian
Association of Banks which
mainly focus the Albanian banking
industry. Bankieri provide readers
with valuable information on the
OVER REGULATION
Could it lead to overkill?
EDITOR’S DESK
Red Tape in 3D! by Elvin MEKA
Investment of banks abroad - A costly endeavor
by Besart KADIA
p.6
p.9
p.11
p.13
Editorial Team:
Elvin Meka
Editor-in-Chief
Eftali Peçi
Coordinator
Junida Tafaj (Katroshi)
Coordinator
Anduena Manushi
Editor
Gert Hoxha
Photographer
Execution of collaterals, an important feature of viable
financial markets by Periklis DROUGKAS
p.14
Financial collateral, a novelty in the Albanian legislation
and its implementation’s challenges by Holta ZAÇAJ
p.15
Printed by:
Risk culture as an aide to ensure effective risk
management at banks by Artiola AGALLIU
p.18
Editorial Board:
Design & Layout: Ladybird Creations
Seyhan PENCABLIGIL
AAB Chairman & Chief Executive Officer, Banka
Kombëtare Tregtare
EXPERTS’ FORUM
Public-Private Partnerships (PPP) and the Financial
Reporting by Hysen ÇELA and Kledi KODRA
p.21
Theoretical considerations and supervision aspects of
pension systems - Opportunities in Albania
by Enkeleda SHEHI
Physical Risk Classification Matrix – The Analysis Means
for Risk Assessment by Roland TASHI
p.23
p.26
ECONOMIST CORNER
SOCIAL CAPITAL
Banks' activity
A BANKER IN FIRST PERSON
BALKAN NET
Interbalkan news
p.29
AAB
Albanian Association of Banks Activities
Alexander RESCH
AAB Executive Committee Member &
Chief Executive Officer, Intesa Sanpaolo Bank Albania
Hubert de SAINT JEAN
Chief Executive Officer, Societe Generale Albania
Bozhidar TODOROV
Chief Executive Officer, Fibank Albania
p.31
p.33
Endrita XHAFERAJ
Secretary General, Albanian Association of Banks
p.34
Hysen ÇELA
Chairman of Albanian Institute of Authorized
Chartered Auditors (IEKA)
p.37
FINANCIAL AUDITORIUM
The use of payment instruments by individuals and
bussinesses by Kliti CECA, Valentina SEMI, Alban PLLAHA
Ioannis KOUGIONAS
AAB Vice Chairman & Chief Executive Officer,
NBG Bank Albania
Periklis DROUGKAS
Chief Executive Officer, Alpha Bank Albania
TECH TOPICS
E-COMMERCE – A tangible reality in Albania
by Marsela KUSHTA
banks in particular.
Bankieri
BANKING SYSTEM
The agreement on European banks rescue rules
by Adrian CIVICI
in general, and of commercial
No. 8, July 2013
INTERVIEW
2012 - A successful year for Fibank Albania
Interview with Bozhidar TODOROV
financial industry's developments
p.5
FRONTLINE
The Financial Regulation Conundrum
by Viktorija PROSKUROVSKA
Bank regulation - A complex future for banking activity
by Avis ANDONI
BANKIERI is the official
p.39
p.42
Adrian CIVICI
President & Head of Doctoral School
European University of Tirana
Spiro BRUMBULLI
Rector - Tirana Business University
Enkeleda SHEHI
Chairwoman of Albanian Financial Supervision Authority
ALBANIAN ASSOCIATION OF BANKS
Bulevardi: “Dëshmorët e Kombit”, TWIN TOWERS
Tower I, Floor 6, A3, Tirana
Tel: +355 4 2280 371; Fax: +355 4 2280 359
E-mail: [email protected];
www.aab.al
www.aab.al
• BANKIERI
• 3
Editor’s DeSK
Red Tape in 3D!
Banking regulation is a must, but it should, however,
be noted that “successful regulation is rare; market
successes, on the other hand, are abundant”
by Dr. Elvin MEKA1
Editor-in-Chief
R
egulation is a fact of life and there is no escape
from it, especially when it comes to banking
sector, which is not just well-regulated, instead
it is hyper-regulated, by now. Usually, the
regulation becomes the word-of-day, during or in
the aftermath of any financial or economic crisis,
and it is commonly judged as the most suitable
vaccine against the collapse of the entire financial
system and to contain the compounded risks
of herd behavior, which follows thereafter. The
spectacular crash of 2008 was a “par excellence”
case for sparking a regulation appetite in a
global scale, but specifically targeted on banking
industry. By a broad viewpoint is seemed to
be more than relevant and welcomed, as the
financial sector and the banking industry turned
to be the hotbed of the crisis. In turn, for more
than three consecutive years, we have witnessed
a steady regulatory undertaking, both in a global
and European scale, aiming at regulating every
square meter of banking activity.
Typically, the run begun with Basel III
requirements and discussions, followed by
numerous European institutional and regulatory
initiatives, which resulted in establishing three
European Supervisory Authorities (ESAs):
European Banking Authority (EBA), European
Insurance and Occupational Pensions Authority
(EIOPA) and European Securities and Markets
Authority (ESMA), the European Banking Union,
the adoption of European banking regulatory
“architecture” CRD IV/CRR, and quite recently,
the European bank rescue rules, which intends
to force losses on creditors and therefore helping
1
Europe move towards proper banking union.
The most admiring feature for these novelties
is the time pace, speed of their drafting and
adoption, creating a pure regulatory “clustering
effect”, within European Union. Even Bank
of Albania is moving steadily with respective
regulatory changes and amendments, which
aim at energizing the loan-making process to the
economy, which is showing a continuous meager
growth rate, along with approaching Basel II
requirements, and in a near-future, even Basel III
ones.
So far, so good! But could hyper-regulation
make markets and the banking system risk-free
and thus produce relevant antibodies for an
established prudent corporate governance and
risk management? Were past regulations illdrafted and regulators short-sighted? Definitely,
rules and regulations are not bad, but too much
red taping could unavoidably give life to the
famous Sir Winston Churchill’s saying: “If
you have ten thousand regulations, you destroy all
respect for the law!” Also, regulators decide and
approve current rules, based on the present and
they have limited abilities to predict the future
consequences of their actions, because of the
simple fact of life: the future cannot be predicted.
Therefore, the banking industry is set into a 3D
red taping environment. How successful these
rules and regulations will be? Let’s close it with
a statement by Professor Peter Lewin: “Successful
regulation is rare. Market successes, on the other
hand, are abundant!”
Head of Department of Finance, EUT-UET
www.aab.al • BANKIERI • 5
FRontline
The Financial Regulation
Conundrum
Regulation is not bad indeed, banks need an
adequate level of regulation to keep the industry
safe and healthy. However, the way it has been
piled up lately, without giving it sufficient reflection,
is not really the right way to go about it.
by Ms Viktorija Proskurovska
Adviser, Economic Affairs
European Banking Federation, EBF
B
anking regulation has been
shaped, tightened and loosened
throughout its history. Notable moments revolve around the Glass–
Steagall Act of 1933 and the Bretton
Woods System of 1944, the wave of
innovation initiated by the US decision in 1971 to terminate convertibility of the US$ to gold, followed by
de-regulation of banks that started on
both sides of the Atlantic at the end of
the 1990s.
In the aftermath of the current financial and economic crises, the European banking sector is undergoing
a regulatory ‘tsunami’. In fact, academics agree that big crises are often
followed by (excessively) stringent
regulation. In the run-up to the crisis, some banks have gone too far in
excessive leveraging, resulting from
shareholder-driven profit-seeking.
As a consequence, banks, regardless of their business model, are now
faced with tougher regulation on a
vast array of issues: from capital and
liquidity requirements, to limitations
to financial leverage, to greater investor protection and increased transparency, to gov
ernance and remuneration issues, to reduction of overthe-counter derivatives, to the way
the sector is structured, and more.
6 • BANKIERI • www.aab.al
Taking a good look at the legislative proposals made by the European
Commission over the past 3 years,
one could think of it as a new set of
EU acquis communautaire. Over 40
different legislative proposals have
been made since 2008 by the Commission’s Directorate General for
Internal Market alone. The current
pace of new regulatory proposals
and seeming lack of understanding
of impact of these overlapping and
sometimes even conflicting regulatory proposals create a very complex
environment for banks to operate
in. One example would be the way
the Financial Transaction Tax is being put in place in the EU. There is
a sense of regulation being enforced
out of fear, rather than constructive
shaping of a visionary framework
for banking and financial industries.
This makes the situation for banks
equivocal.
In an attempt to protect depositors from the potentially harmful effects of banking activity, regulators
around the world are being advised
to separate high-risk financial activities from deposits (Vickers, Volcker,
Liikanen). Although led by sound
reasoning, such structural changes to
the European banks’ business models
may lead to unintended consequences. Capital endowment of banks is becoming a decisive factor in signalling
their trustworthiness to the market.
This approach taken by the markets
should lessen the need to proceed
with structural measures. This is not
to say that regulation is bad. Indeed,
banks need an adequate level of
regulation to keep the industry safe
and healthy. However, the way it has
been piled up lately, without giving
it sufficient reflection, is not really the
right way to go about it.
Clearly, politicians were unprepared for this kind of massive crisis,
where every problem adds up to
previous ones, creating a toxic kind
of pie that EU politicians have to
deal with. It has been five years since
Lehman Brothers collapsed, and by
doing so, shook up the entire global
financial system. The EU financial
framework was largely unprepared
for this ‘surprise’: at the time, the
resolution regime and the Banking
Union were not there, the system of
deposit insurance was not adequate
to the kind of crisis that took place in
2008. Not least, fiscal policies were
left to national policy-makers to do
what they pleased. Banks have been
forward-looking: they started antici-
pating the regulatory changes even
before the key financial sector regulation entered into force, i.e. the fourth
Capital Requirements Package (CRD
IV / CRR)1. Banks have been increasing their capital cushions, provisioning for sufficient levels of liquidity, and deleveraging. Of course, the
compound effect of CRD IV / CRR
is significant, even if unknown, not
to speak of the rest of the regulation
currently in the pipeline.
The banking landscape is changing not only in its regulatory dimension but in its supervisory and geographical/business model, too. In
addition to the substantial and substantive re-regulation of the industry, an overarching structural change
of the highest importance today is
the creation of the euro area Banking Union. Soon, euro area banks are
going to be supervised directly by an
EU-level body, with national supervisors relinquishing oversight over
the most significant banks in the euro
area and cooperating in the oversight
of smaller and local banks. The introduction of the Banking Union will
inevitably change the way the banking business is undertaken in the way
owing to the shift in the way rules are
set (at least for the largest banks in
the beginning), in the way banks are
The banking
community is in
agreement that the
crisis did not occur
because of low
capital levels, but
because of poor risk
management. Risk
management is the
bedrock of any bank’s
foundation, which is
why the right balance
must be struck
between profitability
and prudence.
supervised, and in the way banks reporting lines and content is defined.
Being able to adjust to the new regulatory environment while maintaining attractive margins for investors
will be key to the success of banking
business in the foreseeable future.
In the crisis, the banking sector
has become more national (state aid,
national deposit guarantees, banks’
government bond holdings had an
effect, too). Moreover, the effect of
some of the new EU legislation, as
well as its mounting cost, has led
cross-border banking groups to partially turn away from their overseas
operations. Fewer transactions are
being conducted cross-border, too.
Achievements of the internal market
for banks are willfully being disintegrated. The regulatory and supervisory changes mentioned above represent just the tip of the iceberg of
the ongoing regulatory overhaul in
the EU financial industry. The widely
shared view in the EU financial industry is that while adjustments to
the regulatory environment must indeed be made, over-regulation will
lead to undesirable consequences,
not only for the financial industry,
but for the economy as a whole.
Regulatory arbitrage is an inevitable
side effect to the steady tightening
of regulation. This ‘waterbed effect’
will hamper European banking, because it will cause a shift of risk to
the shadow banking sector. Global
systemic risk will persist, but in a less
supervised area.
A few other unforeseen consequences risk arising. First, European
banks’ universal banking model is
under threat. This is not just about
the way the banking model is built:
it is also about how banks serve the
economy, and how the economy
uses financial services (i.e. no more
one-stop-shop for SMEs!) Secondly, banks’ profit margins are being
squeezed, which is a problem of
double-edged sword: the margins are
squeezed because of the enormous
cost of the new regulatory requirements and reporting. The other side
of the story is that with lower profitability, banks lose investors’ interest,
so de facto the EU banking industry’s
attractiveness is under threat. This
may result in a substantial number of
banks leaving the EU for other, more
financial sector friendly jurisdictions. And at the same time, regulation should focus on the right set of
targets. In addition to increasing the
capital cushions of banks and making
banks more transparent, a stronger
and more determined focus on risk
management within banks is crucial
to financial stability – and thus to a
more stable economic development in the future.
This is a call on the banking sector
to learn to adopt to the new normal,
in order to succeed in this complex
environment, and help the EU rebuild its economy.
1 CRD IV: Capital Requirements Directive IV - CRR: Capital Requirements Regulation
FRontline
Bank regulation - A complex future
for banking activity
The way of capital structuring and the numerous
defensive “cushions” narrow down and hamper the
bank scope and its re-induction in economy.
by Ms Avis ANDONI, PhD Candidate
Lecturer, EUT
he global nature of banking activity, leaves no other alternatives,
T
but orientation towards binding su-
pervisory framework. Living in today’s market without boundaries,
with a transformation dynamism
and capability, with a natural bias
towards high risk for high profit,
makes the updated and territorial enlargement of supervisory framework
a must, in terms of serving as the
main condition for ensuring international banking harmony. But let’s
keep our focus on the EU and count
numerous efforts towards unification: European Central Bank (ECB),
European Banking Federation (EBF),
the three European Supervisory Authorities (ESAs), European Banking
and Financial Regulations, The European Banking Union, etc. Many questions and issues arise in the banking
domain of the European territory.
The question is: European Banking
Authority (EBA), or European Central Bank (ECB)? Which one is the
target? Baseline supervision or simply a joint regulation? Up to which
point should the regulation penetrate? Frankly speaking, the aspira-
tion for a European banking union is
very ambitious, but typically a déjà
vu, because without banking union
and common supervision, there is no
possible solution to potential crises.
In this spirit, the European banking
regulatory “architecture” CRD IV/
CRR, which in harmony with the supervisory package of Basel III, modifies the rules on capital requirements
at banks and investment companies
level, was recently passed, following
months of debates within the Council
of European Union and the European
Parliament. This set of rules shall become effective as of January 1st, 2014
The need to review capital requirements
Apart from negative consequences,
the crisis produced “lessons” on
system’s gaps or the insufficiency
at the regulators level, and furthermore showed the vulnerability of the
financial system, in a global scale.
The first lesson highlights the need
for strengthening the cooperation
among monetary, fiscal and supervisory authorities, globally. Secondly,
it “revealed” the financial institutions which could not absorb market
“shocks” and therefore were not able
to sustain themselves, as a consequence of capital level and its quality, its availability, liquidity management and quality of corporate governance. Thirdly, cross-border failures
of international groups were an unsurmountable challenge for national
authorities, alone.
From Basel II to Basel III
The last financial crisis highlighted a series of loopholes in Basel II
Agreement, which was followed by
a huge need for public support for
re-establishing trust and stability in
the financial system. These loopholes
included: a capital stock which could
not absorb losses, weak management
of liquidity and risk, at group level,
as well as weak governance. Basel III
proposal introduces changes to close
such loopholes, i.e.: more quantity and
quality of capital, aiming at absorbing
potential losses, more balanced liquidity to achieve quality management
of cash flow and liquidity, both in
long and short term periods, to avoid
market “drainage” from liquid assets, financial leverage restriction, in
order not to compromise banks’ solvence capacity, capital requirements for
derivatives, in order to contain bank’s
exposure toward third parties, capital
conservation buffers, which aim at an
additional value of the high-quality
capital reserve.
Could CRD IV and CRR “absorb”
the Basel III Agreement, entirely?
The EU, or its Member States, are
substantial contributors to BIS and
BCBS1, that is, the Basel III Agreement itself, by ensuring that issues
Banks shall then face
higher costs from the
implementation of the
directive, a fact that
shows risk for smaller
banks and on the other
hand, these costs shall
be transmitted to and
absorbed by the endconsumer, in order not
to affect the profitability.
1 BIS: Bank for International Settlements, PCPS: Basel Committee on Banking Supervision.
and particular aspects of European
banks were properly addressed. Both
groups “fight” for the same objective, but Basel III cannot be literally
‘”copied” into the EU legislation,
for two reasons: (1) this agreement
is not a law, because it represents a
set of standards approved globally
by supervisors and central banks, (2)
whereas capital requirements apply
to international active banks, the EU
addresses all banks and investment
companies.
Novelties of CRD IV and CRR
CRR includes the “single rule book”,
which represents a unique set of
rules in the EU, thus harmonizing the
scope rules and offering legal warranties to any market actor. Meanwhile, elements of Basel III, such as:
capital and risk package, liquidity,
leverage and package on exposure
against SME loan-seekers are also
found in the CRR. With regards to
CRD IV, more changes can be spotted
here: earnings, in order to avoid high
risk undertaking, by setting a limit
to bonuses, in relation to fixed salary
(so that it does not exceed 100% of it);
governance, where requirements for
corporate governance are raised, in
order to improve risk management
and efficient supervision monitoring;
increased transparency of banking activity and investment funds on profit,
taxation and subsidies; diversity in
the composition of managing board
members, in order to avoid “groupthink” and stimulate diversification
of risk undertaking and its efficient
The regulation and
the directive shall
have a direct influence
on market capital
structure, where the
distribution of assets
shall be significantly
affected by the
requirements for
capital quantity and
quality, by driving
banks towards short
term and well-covered
debt.
supervision; systemic risk buffers,
which create an additional level of
3-5% of base capital, in order to ensure coverage from non-cyclical systemic risks; global systemic buffers for
global systemically important financial institutions, which are required
an additional liability of 1-3,5% of the
base capital, in order to cover moral
risk and abuse with the money of local taxpayers, in case of failure; other
systemic buffers, which are addressed
to other national financial institutions, with a coverage level up to 2%
of base capital.
To summarize, the objective is to
draft a legal framework for a prudential supervision, which, in many
aspects, has red taped many of financial/bank assets and products, naturally, to strengthen the stability and
avoid crises. But would this regulatory framework so strict push banking into “temptation”? The way of
capital structuring and the numerous
defensive “cushions” narrow down
and hamper the bank scope and its
re-induction in economy. Also, the
liquidity constraints shall force banks
to turn down many investments in
various business opportunities, because of potential influence on liquidity or leverage, regardless of
the fact that they posses the relevant
capital. Other parts of the directive,
such as the transparency and earnings, have a potential negative effect
on banking sector competitiveness,
by considering the fact that other financial sectors do not have the same
constraints. Banks shall then face
higher costs from the implementation of the directive, a fact that shows
risk for smaller banks and on the
other hand, these costs shall be transmitted to and absorbed by the endconsumer, in order not to affect the
profitability. How shall the business
model in banking strategy, governance, processes and systems react,
under the three directive dimensions
(capital, leverage, liquidity)? Practically, many questions arise in moments
of change, but if we are to look at the
Albanian financial/banking market,
which is not yet at the level anticipated by these regulations, that is, less
financial institutions and less products, then how would the discussion about their implementation be,
before the constituent components
get proper life? A natural question is
hereby risen: we agree with the supervision for a healthier market, but
would such regulations form or deform our market?
FRontline
Investment of banks abroad A costly endeavor
Increased capital requirements for investments abroad will make more
expensive the increase of these investments in international markets,
while banks will face a new challenge, to replace these investments
with sound lending projects in Albania.
by Mr Besart KADIA, PhD Candidate
T
he Supervisory Council of the
Bank of Albania, at its meeting
on 27.03.2013, adopted a number of
changes in the regulatory framework,
aiming at improving the loan supply
by the banking sector. According to
Bank of Albania (BoA), a significant
slowdown in lending growth by
banking sector was evidenced during 2012, specifically, estimated at
about 2 percent, and a further decline
in the lending quality. During the last
four years, bank lending underwent
a moderate growth, at an average annual rate of about 10 percent, which
could be considered relatively satisfactory, given the current economic
situation, and when compared with
lending developments in the region,
which has experienced lower lending
rates and sometimes even a decline.
However, such level is manifold
times lower than the growth rate of
lending to the private sector, during
2004-2008, which increased on the
average about 66 percent per year.
Based on these data, BoA’s initiative to encourage banking system
regaining its previous confidence in
terms of having high growth rates
for lending in the country is to be
applauded. This package creates incentives for banks to channel funds
within the country’s economy, by
way of facilitating capital requirements for lending, whereas tightening requirements for investments
abroad. Although a positive public
perception on Boa’s measures is felt
in the air, it appears that such tightening conditions for banks’ investments abroad will have a low impact
in accomplishing BoA’s objectives in
this regard. Despite the fact that deposits in foreign currency, especially
in euro, have increased lending has
remained low, while investments
in products of non-resident entities
(mainly financial institutions) have
increased. Commercial banks argue
that they are bound to invest this
liquidity abroad, due to lack of demand for loans in foreign currency,
while the last movement shows that
banks will face a new challenge, in
order to replace these investments
with sound lending projects in Albania.
According to AAB, investing
abroad is a non-profit activity (or
even losses are incurred) for banks,
and the increase of risk factor (to 100
percent) for such investments is ex-
In circumstances
where the level of nonperforming loans is high
and economic growth
for 2012 is estimated
at 1.5%, the reluctance
of banks to lend in
foreign currency seems
arguable, as the result
of low demand for loans
from real economy in
the country and not as a
rescuing path for better
investments abroad.
pected to have little-to-no effect on
lending growth, affecting more the
commercial banks’ requirement for
capital additions, thus not improving lending in the country, at least
in foreign currency. The measure to
increase capital requirements for investments abroad aims to make such
investments in international markets
more expensive, thus reducing the
capital adequacy ratio and giving a
negative effect on banks. The growth
of claims to nonresidents generally
reflects the weakness of domestic demand for loans, therefore showing
a slowdown of economic growth in
the country. Specifically, as the level
of non-performing loans is high and
the economic growth rate for 2012 is
estimated at 1.5%, banks’ reluctance
to lend in foreign currency seems justified, given the weak loan demand
from real economy in the country
and not as a getaway for better investments abroad.
On the other hand, AAB explains
that banks in Albania are committed to provide the required level of
loans to economy, as their primary
and traditional activity, and this requires well-prepared funding projects by local businesses and a sound,
sustainable and viable regulatory
framework. At the end of its decision,
BoA argues that its main objective is
to maintain the stability of the banking sector and it is willing to identify
the need for further action, should
these measures will be unsuccessful.
Therefore, it is seemed and believed
that BoA and banks will soon reconsider this decision, in another set of
conditions.
INTERVIew
2012 – A successful year
for Fibank Albania
Every difficult moment brings along opportunities,
together with challenges and difficulties and we
believe we are able to exploit these opportunities with
the support and experience of our mother institution.
Mr Bozhidar TODOROV
Chief Executive Officer,
Fibank Albania
BANKIERI: How could you prescribe, in a couple of words,
the year 2012 for Fibank Albania?
The year 2012 was a very good year for us and has been
a turning point for Fibank Albania. Our results were impressive and put us at the first place of the Albanian banking system for all components of growth rate for the past
year. What makes our achievement even more meaningful is that in all performance indicators, and increase in
nominal value of these indicators we are on the top 4-6
banks, like with Euro 30 million increases in total assets
and almost Euro 33 million increases in deposits which is
a clear sign of trust in our bank. Also we had 43% increase
in loans, the highest in terms of % and 6th in nominal
terms among all other banks, and to add something very
important, we had this growth in lending while maintaining an NPL ratio of 8%, a very low figure for the moment.
On the top of all this, during 2012 our Bank reached the
breakeven and recorded a net profit of Eur 700 thousand;
a very considerable profit if taken into consideration the
ongoing economic situation. Our customer base has increased with the same speed as well and has more than
tripled over the past three years, and we are now serving
more than 40 thousand customers. What these figures are
showing is the role that Fibank is playing among the most
active banks in the system and in the Albanian economy
despite its market share, and this is a major achievement
for a growing bank.
BANKIERI: What were the reasons behind this successful year?
In the last 4-5 years we have built a great team of professionals with the required expertise and our growth is
following an increasing trend from some years now. In
total assets, loans and deposits we have had an average
increase of approximately 30% every of the last 3-4 years
and 2012 followed this trend. Another very important reason is the experience of our mother bank, Fibank - Bulgaria, which is a regional bank operating in nearby countries.
These countries have faced similar problems like the ones
Albania is going through now, only few years ago, and
having this kind of experience has proved to be a major
advantage which we have benefited from. Fibank - Bulgaria, which recently became the third biggest in Bulgaria
and the largest locally own, is continuously rewarded
for excellence in customer satisfaction and service, and is
largely perceived as an innovative and flexible institution.
We have successfully implemented our mother banks
know-how, corporate culture and best banking practices
which had a crucial impact on our positive results.
Furthermore we have been focusing in each client and
have offered products tailored to client needs. We have
been focusing in SME-s and retail which we have identified to be our proper market segment, by benefiting in
maximum from the fact of being a small size bank. We
have exploited the potential of Albanian market in relatively new products such as credit cards and where we
gained considerable market share.
BANKIERI: Do you think 2013 will be as successful as 2012,
considering also the challenges banking system and economy is going through nowadays?
Obviously we are aiming to grow further and as mentioned above the bank is in a positive trend from several
years now and has built brand recognition. Fibank Albania has shown to deal well with current economic situation and still is supporting businesses needs for financing
by giving its contributing to the economic growth. We are
very active in assisting local businesses in management
issues in the role of a professional financial advisor. I
would like to mention a personal favorite saying, that every difficult moment brings along opportunities together
with challenges and difficulties. Our believe is that we
are able to exploit these opportunities with the support
and experience of our mother institution, and recently
we have proved to have done so. We think that with an
increased client base we will be able to continue a considerable growth in lending and also in other performance
indicators, because we consider our clients to be Fibank
messengers.
Albania still offers a great potential for further growth
and developments, but they will come only after improvement of legal framework, which Banks through the Albanian Association of Banks are bringing to the attention of
the law and decision makers.
Banking
INTERVISTA
System
Execution of collaterals, an important feature
of viable financial markets
The execution of collaterals would bring positive results and better banking
performance in two directions, in reducing NPL in general and in generating
new opportunities of crediting new buyers that need finance.
by Mr Periklis DROUGKAS
Chief Executive Officer
Alpha Bank Albania
C
orporate and retail lending in Albania was usually secured with
real estate properties. In this perspective, the raising of non-performing
loans, due to the crisis, should have
been followed by execution of collaterals that would have created, by
default, opportunities to be evaluated and appreciated by the market.
In other words, this would have been
the “day of truth” for the collaterals, showing whether the bank had
made a sound decision when considered and accepted the collateral
in its lending activity. But, it seems
that the “day of the truth” is difficult
to be tested nowadays and this is so,
for reasons not related to the market
reaction, something that one would
be prepared to face in this industry,
rather than to unusual reasons. This
has been confirmed more than once,
also, by Bank of Albania, which addressed this issue recently in the Albania Financial Forum, when recognizing the impact of collateral execution in the slow adjustments of property prices to market conditions1.
When it comes to execution of collateral, the paradox is that the tedious
job here seems to be the legal procedures of enforcement and not the
lack of market interested participants
and agents. This was something that
lenders and regulatory authorities
in general didn’t consider and foreseen to be an issue of major concern,
in a country aiming to be integrated
in the European Community. In addition, the legal principles used in
an execution procedure are not subject of great novelties and therefore,
do not represent, in most countries,
substantial legal questions that need
to be addressed with great legal engineering techniques. This has been
the background that made the banking community to appreciate the response of the Albanian Government
to amend the Civil Procedural Code,
supported by Bank of Albania and
World Bank. The new amendments
try to address to a certain extent the
issues created from the set back of
the collateral execution. Some of the
greater concerns were first, the possibility of the debtor allowed to raise
numerous objections and appeals,
thus converting the “execution” into
a contradictory “lawsuit”. It has to
be stressed that, this was not the idea
when the loan contracts were introduced in the Albanian legislation as
executive titles in 2001 and therefore
they created the basis of a legal certainty required for banks and investors to operate. Second, the courts had
great discretion in according rather
The practice of execution
of collaterals, when and
if properly applied, will
impact the non-paying
clients’ behaviors and
will motivate them to
better cooperate with
banks in exhausting all
the possibilities either for
paying or restructuring.
1 Proceedings and Main Conclusions of Albania Financial Forum, 8 April , 2013.
easily suspension measure which impaired execution until the final court
verdict issued on the matter. This
delayed extremely the execution,
because of the lengthy court procedures, a feature of the Albanian Judicial System, that has been spotted by
many international institutions and
do not certainly make Albania proud
of. Therefore, the new amendments,
limiting the power of the courts to
suspend execution, while balancing
also the customer rights, represents a
positive development that should be
appreciated. However, there are still
issues that need a better regulation
in this respect, such as the incentive
structure for Bailiff Officers, unrelated to success which fallout to be
a distortion.
There should be no room for misunderstanding in this matter; the execution of collaterals is not a per se
goal of the banking industry, rather
it’s an important feature of viable
market and economy and I believe
that considering the level of savings
and deposits in Albania, the market
have the needed resources to embrace the opportunities, created by
the execution of collaterals. The practice of execution of collaterals, when
and if properly applied, will impact
the non-paying clients’ behaviors
and will motivate them to better cooperate with banks in exhausting all
the possibilities, either for paying or
restructuring. In addition, the execution of collaterals would bring positive results and better banking performance in two directions: in reducing NPL in general and in generating
new opportunities of crediting new
buyers that need finance.
Banking
INTERVISTA
System
Financial collateral, a novelty in
the Albanian legislation and its
implementation’s challenges
A very important aspect of the new regulations is that
the financial collateral is expected to create a new
preference ranking over collateral, aiming to establish
for the taker of collateral a secured creditor’s status
against claims of third parties.
by Ms Holta ZAÇAJ, LL.M.
Manager of Legal Services Section
Alpha Bank Albania
T
he new legal regulations on financial collateral provided in the new
law on Payment Systems1 represent a
novelty in the Albanian legislation,
inspired by the relevant directives of
European2 and worldwide legislation
and practice. These regulations aim to
update and modernize the Albanian
legislation, which has made use up to
now to rigid principal related to collateral that were not in line with the
current realities and development of
financial practice worldwide. In this
perspective, the acknowledgment of
securities and cash (in accounts) as
collaterals and their placement under a different and specific execution
regime, is very important and adequate, due to the nature of these type
of collaterals and the fact that they are
under possession and administration
of the financial institutions (banks)
involved in the respective financing/
crediting activity. In this framework,
the execution procedure for financial
collaterals is foreseen to be more efficient and less costly3, thus separating these collaterals from the general
and typical execution procedures,
foreseen by Civil Procedural Code4.
However, it needs to be stressed that
the execution results to be easy and
efficient, in case of cash collateral,
because the execution is completed
directly within the bank, due to the
fact that the latter has the cash in its
Regardless of the novelty
and actuality provided by
the new regulations, the
financial collaterals are
destined to find less use
than we would like to,
because of the restriction
of their implementation,
which is determined by
the fact that only entities
(legal persons) do qualify
as subjects for entering
in a financial collateral
agreement.
possession, something that it cannot be stated for the securities. In a
comparative perspective between
the cash and securities collateral, the
idea of the regulator in achieving an
immediate and efficient execution is
impaired for various reasons:
(i) Securities cannot be hold (in possession) by the banks, because
they do exist in a dematerialized
(“book-entry”) form in Albania;
(ii) The registration of securities’ ownership and the relevant transaction
of the ownership title transfer seems
to be unclear, due to lack of Central
Depository for Securities, which for
the sake of analogy would serve
the same purpose as the Real
Estate Registration Office. Currently, the companies’ shares are
registered at the special register,
kept by joint-stock companies
themselves, and they are registered at National Registration
Center (QKR) and at the Shares
Registration Center (QRA), as
well. It is important to note that,
the transfer of shares’ ownership
title is conditioned by the registration of new shares’ owner at
the company’s share register5,
whereas according to the law,
1 Law No. 133/2013 “On Payments system”.
2 Directive 2002/47/EC of European Parliament and EC date 6 /6/2002 on financial collateral amended with Directive 2009/44/EC
European Parliament and of EC date 6/5/2009.
3 Article 1, 28,29 No. 133/2013 “On Payments system”.
4 Part Four, Chapter 2, Civil Procedure Code.
5 Article 117/2 and 119, Law No.9901, date 14.4.2008 “On entrepreneur and commercial companies”.
the evidence of such ownership
title transfer at QKR6 has only a
declarative character and value.
The same is valid also for shares’
registration at QRA7, whose
regulatory legal framework results to be outdated and not in
compliance with the principles
of the Law on Entrepreneur and
Companies, which do relate the
shares ownership title transfer
and the shares’ deriving rights
such as: the voting right and to
dividends, with the moment of
entering into the contract. Therefore, the securities’ execution
pledged as financial collateral is
more complex and difficult than
the execution of cash;
(iii)Because of legal restrictions8, banks
are unable to execute the securities
and hold them, thus, the execution
of such collateral is conditioned
by finding an interested buyer,
other than for cash, which banks
do execute directly in their favor;
(iv)The value of securities remains also
an issue, which would affect execution, since securities in Albania are
not listed and traded in the stock
exchange. So, they do not reflect
the market value, and therefore,
even in ordinary transactions
they are traded based on their
face9 value. However, the execution based on face value according to initial capital, would
create substantial grounds for
the execution to be disputable in
the court of law. Thus, based on
the above-mentioned reasons, a
further intervention is needed in
It seems that the
banking and business
community will be
suffering not only the
fact that they will have
to return to Civil Code’s
classical instruments
for guaranteeing the
financing activities, but
they will have even less
security charge means
at their disposal.
the relevant laws to achieve the
desired effect, regarding the execution of financial securities as
collateral.
Another very important aspect
of the new regulations is that the financial collateral is expected to create a new preference ranking10 over
collateral, aiming to establish for the
taker of collateral a secured creditor’s
status against claims of third parties,
both in an ordinary course of business and in a bankruptcy scenario.
However, this preference is impossible because of the preference ranking foreseen under Article 605 of the
Civil Code. Thus, the advantage in
relation to financial collateral encompasses only the efficiency in relation
to procedural terms, and does not
create despite this new law any new
preference ranking, due to the hierarchy principle of legal norms.
Finally, it is worth mentioning
also that regardless of the novelty
and actuality provided by the new
regulations, the financial collaterals
are destined to find less use than we
would like to, because of the restriction of their implementation, which
is determined by the fact that only
entities (legal persons) do qualify as
subjects for entering in a financial
collateral agreement. Considering
that securities in Albania are owned
generally by individuals and that the
group companies (linked ones) does
not represent a widespread reality,
it makes the financial collateral with
securities less applicable. Similarly,
financial collateral with “cash” has
found a broad applicability in practice. Generally shareholders have
used personal deposits to secure
loans of companies, in which they do
have participations. However, new
regulations on the “cash” collateral
do not cover the above-mentioned
practice due to the limitation of legal person as subject for the financial
collateral agreement. The only cases
that could benefit from the new regulations, are the related companies
when one company guarantee the
obligations of the related company
and this doesn’t seem to be a representative practice in the Albanian
market.
In conclusion, considering also
that new regulations on financial collateral were accompanied by amendments to the Law On Security Charges, which made the pledge of security
charges inapplicable for securities
owned by individuals and for other
intangible properties, such as “receivables”11, it seems that the banking
and business community will be suffering not only the fact that they will
have to return to Civil Code’s classical instruments for guaranteeing
the financing activities, but they will
have even less security charge means
at their disposal.
6 Article 74 (2) Law No.9901, date 14.4.2008 “On entrepreneur and commercial companies” and article 43/4, 44/b Law No. 9723, date
3.5.2007 “On National Registration Center” .
7 DCM NO. 112, date 19.2.1996 “On establishment of the Share Registration Center”.
8 Article 59, Law No. 9662, date 18.12.2006 “On banks in the Republic of Albania”
9 Article 105,107, Law No.9901, date 14.4.2008 “On entrepreneur and commercial companies”
10 Article 29, Law No. 133/2013 “On Payments System”
11 Article 1, Law No. 132/2013 on “ Some amendments of the law No. 8537, date 18.10.1999 “ On security charges”, as amended.
Banking System
Risk culture as an aide to ensure
effective risk management at banks
Enriching risk culture, along with other elements, such as:
risk management policies, rules and procedures, systems,
techniques, technology used, etc., can be considered as
a promoter for banks’ effective management.
by Ms Artiola AGALLIU
Deputy Head, Risk Management
Department
Alpha Bank Albania
I
t has been years now that risk management has become one of key requirements to ensure effective bank
governance. On the other hand, capital requirements, based upon risks
they face and weather, have added
pressure on banks for a more effective management of their activity.
Today, banks have built internal systems and have committed relevant
staff, to identify, assess, measure and
address all risks they face, by giving them the same importance. Now
they are capable to measure and assess risks, either under normal banking and financial markets activity, or
under abnormal conditions, even in
extreme situations. They have moved
from classical risk assessments, based
on forecasted/expected amounts, to
the more sophisticated methods, by
including not only their directors’
opinions, especially those of bank’s
board of directors, but also the shareholders’ ones, about risks.
Despite these positive steps in the
risk management process, risks and
behavior towards them is not being
understood by all parties involved
in this process, starting from bank’s
employees to even higher levels of
hierarchy. The recent financial crisis
has highlighted, alongside the need
for an improved risk management
function, the need for creating and
enriching the risk culture.
Risk management function and its
role in the bank
Risk management function is one of
the most important functions within
a bank structure. During the last
Risks and their
respective management
process must get
proper understanding
from all bank
employees, in any
position they are, and
the best way to achieve
it is to encourage and
promote a relevant risk
culture at the bank,
which must be based
upon highly professional
standards and ethical
values of all bank
staff and other parties
involved in it.
years of the last century, the role of
risk management in financial institutions in developed countries has been
increased significantly, whereas in
Albania, such development is a phenomenon of the last decade. Surely,
this is due to the development of
the banking system itself, which has
not reached comparable levels to
developed countries, yet. However,
chances are that the gap could be
filled within a short time. There have
been continuously requirements to
promote the development of such
function, either form banks or the
regulatory authority, not to mention
that the latter has undertaken an institutional commitment, by adopting
the last year’s regulation: “On basic
principles of management of banks
and branches of foreign banks and
criteria for approval of their administrators. From the perspective of risk
management, this regulation brought
two major innovations: (1) it clearly
defines bank’s risk tolerance, requiring form high-level management
structures: management board and
directorate “to recognize the full and
clear profile of bank’s risk” and in parallel “to promote (stimulate) an appropriate management culture”; (2) it determines the need for establishing risk
committee, as one of the most important committees, which shall report
directly to the bank’s Management
Board. Regulatory authority clearly
defines, through this requirement,
the role and importance of risk man-
agement function, as a basic function
for bank management.
On the other hand, during recent
years, banks’ own requirements for
developing the role of risk management have been risen earlier and are
certainly increased. These are viewed
with high priority, given that the risk
management function has a key role
in the success or failure of internal
control, and jointly with the audit
function, they represent the “guarantee” for bank’s shareholders. If risk
management function was often confused with the reporting function or
with that of the auditors, and not seen
as a separate function, but was being integrated into the processes and
procedures of the bank, today’s role
and independence is guaranteed. The
ever-increasing demands by bank executives on risk management unit,
its inclusion in many existing or new
decision-making processes, by considering it as a key point within bank,
either from internal or external auditors and also by regulatory authority,
banks’ increasingly investments on
technology systems that serve risk
management etc., bear witness to this
development. The majority of banks
in Albania have already a special risk
management unit, as part of their
own organizational structure, or at
least appointed experts, who have
been assigned to this function.
Risk culture, a guarantee for the
effective risk management
The term “risk culture” refers to the
bank’s total value, resources, knowledge and understanding of risks
faced (or shared) among a group of
individuals, in particular bank employees or other groups within the
bank. The interpretation or the practical understanding of such a concept
requires a breakdown of factors and
their respective analysis of reciprocal
effects included in this definition, as
well as other factors, that indirectly
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affect them. By breaking down the
concept, it is noticed that the culture
is born from personal ethics of interest-bearing individuals in the bank.
Indeed, each of us has a personal risk
approach, which in combination with
personal ethics, shape individual behavior. The whole set of individuals’
behavior within a group (e.g., the
group of employees, or other groups
within the bank), form the group behavior. The term “behavior”, both at
individual and group level, means
repetitive behaviors and not simply
“isolated” behavior, or which occur
quite rarely. Also, the attitude and
behavior of an individual or group in
the bank, just like in any other work
environment, is influenced by the
prevailing group culture. Schematically, the correlation of these factors
is given in the following chart, and
their aggregation forms bank’s risk
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culture.
Risk culture serves as an aide to
effective risk management at the
bank, thus affecting, in some cases,
more than the risk management process. Practically, such culture has a
positive effect on:
• clear communication of bank’s
risk strategy and its risk tolerance,
• ensuring high standards of
communication,
transparency
and information-sharing within
the bank,
• understanding and rapid vertical
escalation of risks identified, from
lower levels to higher levels of
bank management.
All these factors play a crucial
role in a successful accomplishing of
risk management process at the bank.
Specifically, this process is not exclusively linked to the risk management
unit, and not only with high-level
management and decision-making
structures in the bank. In addition,
an effective risk management is accomplished only through inclusion
of employees, individuals, or other
bank groups. All bank employees
and directors should feel that risk
management is everyone’s responsibility. For this reason, enriching risk
culture, along with other elements,
such as: risk management policies,
rules and procedures, systems, techniques, technology used, etc., can be
considered as a promoter for banks’
effective management.
EXPERTS’ Forum
Public-Private Partnerships (PPP)
and the Financial Reporting
Although Albania has not a clear guideline on public sector entities’ accounting and
reporting, in relation to the property subject to concession agreements, a valuable
help in this regard could be the use of the IASB Framework, the lease agreement
standard and suggestions by IPSAS Board.
by
I
n the frame of current trends,
where governments are constantly retracted from direct involvement
in performing administrative tasks,
along with the aim to improve the
quality of services to citizens, even in
Albania we are witnessing a rapidly
growing public - private partnership
(PPP). Governments are increasingly
faced with the challenge of building
infrastructure and other public facilities, in response to growing population demands and also, with the need
for proper repair of existing infrastructure and public facilities, which
are being deteriorated, mainly due to
delays for their maintenance.
The distinguishing feature of today’s developments in our country is
the increasing number of PPP agreements, effected or in the process of
implementation, related to the construction of various infrastructure facilities for an efficient exploitation of
mines, construction of HPPs, various
public centers and facilities, various
public services, etc. PPP agreements
can take different forms, according
to the level of private sector involvement and the means used to achieve
them. A particular form of such partnership are concession agreements
(CA), which differ from other forms
of PPP agreements, due to the fact
that the risk and benefits associated
with the construction, possession
and use of the asset (property), subject to the agreement, together with
the respective control on it, are in a
Prof. Asoc. Dr. Hysen ÇELA
Chairman of Managing Board,
Institute of Authorized Chartered
Auditors of Albania (IEKA)
&
The accounting treatment
and the respective financial
reporting for concession
agreements by private
operators are covered
by IFRIC 12 - Service
Concession Arrangements,
of IASB Interpretations
Committee. If the financial
reporting that property
will be based on legal
ownership only, it would
not be possible to ensure
a financial reporting which
reflects properly the asset,
based on the principle
that: “economic substance
prevails over legal form”.
large scale divided between public
and private sector units, which enter into agreements. Segregation of
these aspects of asset/wealth, as well
as the complexity of related transactions has often made the financial
reporting by public and private entities, so uncertain. Such examples
could be: the use and maintenance
of a highway by a private company
against a fee, production and distribution of national passports, excise
Mr Kledi KODRA, FCCA
Head of Audit Department,
PwC - Albania
stamps production, construction,
operation and maintenance of large
parking lots, construction and operation of power plants, etc. In many
cases, if not most of them, the implementation of these agreements by the
private sector requires the collaboration of the latter with banks, in order
to ensure necessary financial resources (e.g. the case of HPP construction),
where borrowing guarantee can be
issued either by the public sector, or
by different agencies or donors. In
these circumstances, the financial reporting means reliable information to
many parties involved.
Although Albania has not a clear
guideline on public sector entities’
accounting and reporting, in relation to the property subject to concession agreements, a valuable help
in this regard could be the use of the
International Accounting Standards
Board (IASB) Framework, the lease
agreement standard and suggestions
by Board of International Public Sector Accounting Standards (IPSAS).
The lack of specific regulations on
this issue may cause divergences in
the way property/asset and services are reported. Furthermore, there
could be cases when the property is
not reported as such, neither by the
public sector nor by the private one.
The focus here will be on the issue
of accounting and financial reporting,
from the perspective of public sector
entities, only, (i.e. the providers),
thus giving a limited consideration to
operators of these agreements. This is
so, because the accounting treatment
and the respective financial reporting
for concession agreements by private
operators are covered by IFRIC 12 Service Concession Arrangements,
of IASB Interpretations Committee.
If the financial reporting that property will be based on legal ownership only, it would not be possible
to ensure a financial reporting which
reflects properly the asset, based on
the principle that: “economic substance
prevails over legal form”. Thus, it is
deemed as indispensable, to analyze
either relations between parties, or
the asset or activity, subject to the
agreement.
Under IPSAS, assets are defined
as: “resources controlled by an entity as
a result of past events and from which
future economic benefits or service potential are expected to flow to the entity.”
The notion of control over resources
is clearly presented in definition. In
order for the provider of property,
subject to the concession agreement,
to report the property as an asset, according to the definition, it must not
only have control over the property, but also earning future economic
benefits or potential services. Control over the use of property is a key
principle that is also addressed in
the conclusions reached in IFRIC 12.
According to this principle, the private operator does not have to report
as an asset any of its own property,
subject to the agreement which is
covered by such interpretation. According to this interpretation, the private operator does not recognize the
property as an asset, but recognizes
an intangible asset or a financial asset
that reflects the right given to it by
the provider to use the property, or
to earn the contracted cash flows. According to IPSAS Board, the nature
of the criteria contained in the scope
of IFRIC 12, is generally appropriate
to determine whether the provider
has underlying control on property,
under these agreements, for financial
reporting purposes. Bound together,
these criteria show that:
(a) The provider shall have a continuing right to request that the property be operated in a way that the objectives set for the service to the public are met, throughout the life the
agreement is in force, and beyond;
(b) The operator’s practical ability
to sell or pledge the property is therefore limited.
Despite the operator’s control
over certain aspects of the services
generated by the property, the general usage of that property is limited
to the provider’s objective, defined
in the Agreement. Moreover, the
concession provider controls key operating aspects of the property, such
as: applied tariffs and fees for its use.
Should similar criteria as those prescribed by IFRIC 12 are satisfied then
is is generally accepted that the operator will operate the property on
behalf of the provider, and that the
latter has final control over the property.
Based upon IPSAS 23 and IPSAS
6 instructions, it can be argued that, if
the underlying control of concession
provider over the property is similar
to regulatory control, such control,
alone, is not sufficient to match the
concept of control given to the definition of an asset for the provider’s
financial reporting purposes. For example, the government may transfer
a land area of
a public university,
stating that the land will be used for
building the campus, only. Under
IPSAS 23, despite this definition, the
public university (in this example
“the user”) controls the land and will
present it, in its financial statements,
as an asset. Also, the university needs
to recognize a liability, if the (land)
destination will be considered as a
condition, which means that, if the
land is not used for the purpose for
which it is given, then it will be returned to the legal owner. Financial
reporting results in this example may
seem in conflict with the guidelines
discussed above, concerning the control over property under this agreement, where the party that imposes
restrictions on the use of assets (provider) and not the user of the asset
(operator) is considered, for financial
reporting purposes, as having control
over the property. The key difference
between this example of land transfer for the university and the service
concession arrangement is that the
concession provider retains control
of the remaining interest in the underlying property of the agreement
until its end. In typical agreements as
those mentioned above, the asset is
not returned to the transferor, at the
end of the agreement. Even where the
destination is a requirement, the asset remains with the operator, upon
the fulfillment of this condition, so in
case of the university, at the time the
land will be used to build the campus, the asset (land) remains to be reported in the financial statements of
the University.
(to be continued in the next edition)
EXPERTS’ Forum
Theoretical considerations and
supervision aspects of pension systems Opportunities in Albania
The contribution of third pillar is negligible, in relation to the size
of the Albanian economy, so the reform of the second pillar
will energize the pension system, by making a contribution in
addressing long-term challenges that accompany it.
by Ms Enkeleda SHEHI
Chairwoman
Albanian Financial Supervision
Authority, AMF - AFSA
P
ension funds represent some of
the largest sources of capital in
many countries, in some cases, by
exceeding 100% of GDP. Such capital
can have many positive effects on a
country’s development, by providing liquidity to financial markets and
also contributing to the development
of institutional investors. Pension
funds and institutional investors
could exert an outright influence on
corporate governance, which helps
different countries in attracting and
retaining capital. Likewise, through
saving and social protection longterm reliable mechanisms, pension
funds bring positive effects, by expanding planning horizons and reducing incentives for counterproductive behavior.
According to Broeders, Kortleve,
Pelsser and Wijckmans1, pension systems can be defined along three dimensions:
(1)Pension benefits: (i) guaranteed
payments (defined fixed benefit
plans), versus non-guaranteed
payments (defined fixed contribution plans), like the voluntary
pension model in Albania.
(2)Method of financing: capitalized
against PAYG. PAYG systems
are sensitive to demographic and
macroeconomic developments,
whereas the capitalized systems
against inflation and investment
risk.
(3)The level of risk-sharing: risksharing versus no-risk sharing
plans. Stakeholders, who qualify
as risk bearers are: sponsor, current participants and prospective
participants. In general terms,
there are two types of risk – sharing: within a generation (intragenerational) and between generations (intergenerational).
OECD identifies three pillars,
commonly known as pension system
The key objective of
pension supervision
is that the pension
fund must be capable
of accomplishing
its commitments
and expectations
conveyed to its
members, in line with
benefits and risks,
against which the
fund is exposed to.
pillars, namely: the first pillar, which
is mandatory and consists of the redistribution element, the second pillar, which is also mandatory and consists of saving elements and the third
pillar, which is voluntary.
Many European countries have
the second column, but each country
can have different plans. OECD identifies four plans within the second
pillar:
(1)Defined benefit plans - DB, where
the pension income depends on
the number of years of contributions and personal income.
DB schemes are capitalized and
risks between parties are shared
among multiple stakeholders.
(2)Defined contributions plans - DC,
where contributions are deposited in individual accounts. Contribution and investment income
collections form the future pension payments. DC schemes are
capitalized, but there is no risk –
sharing between stakeholders.
(3)Point schemes - PS, where employees earn points, based on
income they earn every year.
Upon retirement, the amount of
the pension point is multiplied
by a certain point value, to determine the level of payment earned.
These schemes are classified as
PAYG scheme, without risk-sharing among stakeholders. With
some exceptions, these schemes
are conceived as capitalized, too.
(4)National accounts - NDC, where
1 Dirk Broeders, NielsKortleve, AntoonPelsser and Jan Willem Wijckmans: The design of European supervision of pension funds,
Network for Studies on Pensions, Aging and Retirement, February 2012.
contributions are recorded in individual ‘theoretical’ or notional
accounts (the account balance
exists in the records of the institution that manages the account,
only) and a certain rate of return
is applied on the account. On retirement, the notional “theoretical” capital accumulated is converted into retirement payments.
NDC schemes are classified as
PAYG systems, where the risk is
shared with the sponsor.
The supervisory instruments, a
regulatory entity should possess for
proper supervision of this segment,
are drafted depending on the model
that will be selected.
Pension regulators are faced
with ever-increasing challenges, in
a globalized economy and world.
National competitiveness, market
development, efficiency and security
for members of pension funds, are
today’s main challenges for supervisory authorities, let alone the fact
that pensions are sensitive to political
attention. Placed in such reality, the
supervisory models are mainly oriented towards results, risk management, efficiency and transparency.
Pension supervision is chiefly based
on two main pillars, which are centered on transactions, or structural
supervision. In the first case, the focus is on agency risks and procedural
standards, while the second case, put
emphasis on quantitative limits, financial entities from the perspective
of systemic risk and portfolio. An increasingly emphasis is placed on risk
management and results, rather than
to structures and rules. The biggest
challenge regulators face is adapt-
ing to these changes, structures and
capacities to keep and attract suitable
staff with financial and technical expertise, high flexibility in the adoption of structures, compliant with the
dynamics of market development
and full autonomy of these institutions.
What about Albania?
The modest level of development of
third pillar in Albania, due to the fact
that the scheme is voluntary, and the
absence of the second pillar, produces a high opportunity cost for AFSA’s
supervisory capacities. However, in
recent years, AFSA has undertaken
a number of positive steps towards
reforming the third pillar of pension
system. The Law No.10197, dated
10.12.2009, “For voluntary pension
funds”, set the necessary standards
for an effective administration and
supervision of voluntary private
pension funds, by creating a new
experience, according to European
standards. The selected scheme is a
defined contribution one, capitalized,
in line with recent global trends.
The most difficult ongoing challenge for AFSA will be to ensure financial independence and structural
flexibility, with the main goal of attracting and retaining highly expertized staff and the dynamic adaptation of structures, in line with the
development of supervised markets.
Despite existing challenges in the
design of a fair reform for the second pillar of pension system, such
a reform would make a positive impact on the country’s general development and particularly, the capital
market development, by producing
new stock of capital to be invested
in the financial system. The low level
of assets under management in the
third column, specifically at ALL 314
million and relatively insignificant
participation of 7,289 members make
the reform of the pension system a
real must.
As the graph shows, the contribution of third pillar in Albania
is negligible, in relation to the size
of economy. Thus, only a reform of
the second pillar will energize the
pension system in Albania and will
contribute to address long-term challenges that accompany it. Therefore,
the long-term transfer of a part of
pension system to the private sector,
will reduce significantly the political
risk, by transferring the responsibility to individual management and
responsibility. The stronger the role
and importance of the second pillar
of the pension system, the more significant the benefits of reform will
be, thus increasing pressure on the
prudential management and deficit
reduction of the whole system.
Importance of pension funds relative to the size of the economy, in selected
non-OECD countries.
In percentage of GDP
(ONGÒ+ONGÒ#HINA
#OLOMBIA
0ERU
7EIGHTEDÒAVERAGE
"RAZIL
#OSTAÒ2ICA
3IMPLEÒAVERAGE
"ULGARIA
4HAILAND
&ORMERÒ9UGÒ2EPÒOFÒ-ACEDONIA
2USSIANÒ&EDERATION
)NDONESIA
2OMANIA
,ATVIA
)NDIA
5KRAINE
0AKISTAN
!LBANIA
Source: Global Pensions Statistics, OECD 2011
EXPERTS’ Forum
Physical Risk Classification
Matrix – The Analysis Means for
Risk Assessment
The risk level analysis is a process which is not carried
out during the planning stage of a building with
banking functions, only; it should follow dynamically
all developments, events and changes in the urban
infrastructure, where the bank unit operates.
by Mr Roland TASHI
Chairman, AAB Bank Security
Committee
S
afety and security in the banking
and financial system must be considered as a strategically important
factor, as it affects, significantly, businesses involved in the system, thus
being instrumental in their performance and progress. Risk management in a bank must be viewed in
an integrated optics, which means
analyzing many internal and external factors and particulars, that cause
it and also exposing the institution
against the risk. Despite the fact that
a bank is perceived as a unitary institution, it is typically comprised of
many business units and employees
spread throughout all these units.
The banking risk should be assessed
as the analytical sum of all riskbearing factors, a sizeable number of
which are difficult to predict, whereas the rest are almost unpredictable.
The actual trend in banking industry is to be next to the customers, aiming at providing “friendly”
service to them, by applying free
entries and open windows, which in
turn, increases the elements of risk.
In this regard, the bank management
has the difficult task to balance such
trend, with the need to increase the
protection level for workers operating in bank counters and within bank
premises, in cases of abusive situations and criminal events. The in-
creasing financial integration of population, and its rising approaching
with banks, the diversity in bank layout facilities, and protection methods
and techniques banks apply, sophisticated forms and methods employed
by criminals during a bank robbery,
constitute elements which require
a special analysis of the factors that
favor, enhance or reduce the risk, as
well as condition the attempts to find
ways in recognizing and assessing it.
Banks have proper
tools and models
for robbery risk
assessment analysis,
but one of the
possible ways is
constructing and
completing the
“Risk Classification
Matrix”, which helps
to envisage a clear
picture of elements
and factors that
favor it, and also
in determining its
respective level.
How can one define the risk level
of an object, in the selecting phase
of turning it into bank premises, or
where bank conducts its activity, so
as to plan protective and defending
measures against criminal abusive
actions? Banks have proper tools and
models for robbery risk assessment
analysis, but one of the possible ways
is constructing and completing the
“Risk Classification Matrix”, which
helps to envisage a clear picture of
elements and factors that favor it,
and also in determining its respective
level. It is a complex table, which is
filled with all those elements which
the bank considers as risk “producers”, and which have a certain specific weight, expressed as a percentage. By calculating the level of each
element in the table, a certain level of
risk is assigned, expressed with the
following risk figures: 1 (low), 2 (medium) and 3 (high).
Some of the elements, suggested
to be placed in the matrix, in order to
determine the bank facility risk level
through, are given below:
- Crime level in the city, or the
area the bank will operate. These
data are reported by Prosecution Office, in its annual reports. An urban
area with high propensity for crime
level and social concerns, significantly affects the risk level.
- Position of the object in the city,
or its position in relation to geographical area around it. Facilities
located in suburban areas, should
be considered “high risk” facilities;
those located near police stations and
patrolled routes have lower risk.
- Protection of facility with security personnel. This is a requirement
imposed by Bank of Albania; however, providing such internal and external service for the business unit and
their proper combination, study and
location assessment, where and how
this service should be conducted, increases the security level.
- Counters’ positioning, in relation to bank premises entry. Counters
which are not in the sight line with
the entrance, affect the increased risk
level, during criminal incidents and
robberies.
- Facility’s entrance surveillance
by desk/counter employees and service supervisor. Business units that
are projected with “hidden” counters, with no direct sight line with entrance and client waiting area, should
be assessed as “high risk”, because
such layout helps a hiding and rapid
robbery.
- Counters layout and their operation mode. Open counters, without
physical protection structures should
be assessed as “high risk”, because
ees but also its customers inside the
bank. Applying controlled entrances
in the bank “helps” the balance of
arguments in favor of business, who
tend to be more communicating with
customers, by requiring the use of
open counters, without glass and
other physical protection.
Other elements that affect the risk
assessment, can be added up in the
risk classification matrix, such as:
the nature of buildings and roads,
or pass away systems around any
banking facility, possibility of quick
getaway after the robbery, the large
concentration of individuals near the
bank branch, because of public transport stations, shopping centers, the
amount of money kept in desks, and
their respective allowed limits, etc. It
should be understood that the risk
level analysis is a process which is not
carried out during the planning stage
of a building with banking functions,
only; it should follow dynamically all
developments, events and changes in
the urban infrastructure, where the
bank unit operates.
they are favorable to acts of robbery.
Their construction must be accompanied by increased protective measures in the unit entrance.
The last element deserves more
attention, because of its influence
over criminal incidents, resulting in
bank robberies. In the period of 20002012 the banking system has recorded 35 criminal offenses, classified as
bank robberies, out of which 28, or
80% of them, have resulted as completed. In all cases the bank units,
subject to robbery, have been those
with “open” counters design and
with free entrances. In this regard,
the elements of risk security matrix
that address access/entrance to the
unit and the counters layout and operation, should be treated very carefully, as they have a greater weight
in determining the specific risk exposure and the respective risk level. It
should be noticed that, the sophistication of counters’ physical security
provides protection for staff located
within them, whereas the application
of controlled entrances to the bank,
with various physical and electronic
systems, protects not only employ-
RISK CLASSIFICATION MATRIX
Model of unit entrance
Urban zone plan, possibility for getaway
Amount of money in counters
TOTAL POINTS
18%
18%
6%
6%
100%
1
3
3
3
1
2.4
High
Risk
Facility “B”,
Berat
1
2
1
3
2
2
3
3
1
2.1
Medium
Risk
Facility “C”,
Saranda
3
1
1
1
1
2
3
2
1
1.8
Medium
Risk
Low Risk:
Medium Risk:
High Risk:
1 ÷ 1.3
1.3 ÷ 2.3
2.3 ÷ 3
Reducing cash amounts at counters (reducing
cash physical presence at counters)
Counters’ layout, modelling and operation
12%
3
Providing security services
(internal and external service)
Facility’s entrance surveillance by desk/counter
employees
12%
1
Applying safe counters
(closed counteres, 1/2 glass)
Counters’ positioning, in relation to bank premises entry
8%
3
Changing entrance model, applying controlled
entrances (cage rotary door systems)
Protection of facility with security personnel
10%
2
Facility Risk Assessment
Position of the object in the city/center/suburb/rural
zone
10%
Facility “A”,
Tirana
Bank Facilities
Crime level in the city (annual data from Prosecution
Office)
Recommendation to increase
safety level
0.00
1.30
2.30
0.00
economist corner
The agreement on
European banks rescue rules
This agreement is considered as the most important
stage towards European banking union, paving the way for
next stage of creating a European regulatory mechanism
for banks (Single Resolution Mechanism – SRM).
by Prof. Dr. Adrian CIVICI
President & Head of Doctoral School
European University of Tirana,
EUT - UET
I
n the context of measures and reforms towards implementing the
European Banking Union, in 27 June
2013, the European finance ministers,
under the motto of “trying everything
to avoid the remergence of any type
of banking crisis , resembling that of
the cypriot one”, finally agreed and
“in extremis” and important compromise and agreement, thus hammering out a set of rues and measures “to
restore financial equilibrium or otherwise liquidate banks in difficulty or
in a bankrupt situation”.
The effects of the financial crisis
and particularly the high cost paid by
the EU in supporting its banks in difficulty (EUR 1,600 billion, or 13% of
its annual GDP for 2008 - 2011), conditioned new rules to seek “the elimination of crisis’ costs, an increased
accountability in banks’ operations, a
strengthened resistance of the banking system against crisis, and particularly a reduction of negative impact
and complications they caused to the
growth of the Eurozone’s and EU
sovereign debts”. In the framework
of the foundations on which European banking union is supposed to
be established, such as: the unified
supervision of all EU banks; the establishment of a uniform system to
protect depositors and the economy
from banking crisis; the creation of
a European fund for emergencies
or resolution of banking crises, the
amendments of some important rules
that guide the banking activity, etc.,
the new agreement on bank rescue
rules was immediately deemed as
Such measures and also
the unified system, do
successfully implement
the recapitalization, or
the “correct liquidation”
of banks in crisis, e.g.
some activities could be
transferred or sheltered
within another specific
bank, called “bridge
bank”. Similarly, it is
possible that, through
the “bail-in” instrument,
some parts of banks in
crisis or the bankrupt
bank liabilities, may be
converted into equity
capital or otherwise be
amortized.
“quite important for the EU financial
stability”, as a “cornerstone of EU
efforts to break the vicious circle between banks’ debt and sovereigns.”
According to the Eurogroup President, Mr. Jeroen Dijsselbloem, “if
a bank is faced with problems, we have
already a unique set of rules at hand,
throughout Europe to decide who should
pay the bill”.
These new rules are expected to
enter into force after approval by the
European Parliament, starting from
2018. In this context, such measures
and also the unified system, do successfully implement the recapitalization, or the “correct liquidation” of
banks in crisis, e.g. some activities
could be transferred or sheltered
within another specific bank, called
“bridge bank”, which manages them
in perspective. Similarly, it is possible that, through the “bail-in” instrument, some parts of banks in crisis or
the bankrupt bank liabilities, may be
converted into equity capital or otherwise be amortized.
The recent debate and contradictory positions were synthesized to
the fact that “who should pay the
costs of crises in various banks: public funds or banks?” The Eurogrup
finance ministers agreed to avoid
all or partial payments from public
funds or from contributors/depositors, in cases where a bank should
be restructured or liquidated, that
payments must respect the following
hierarchy: bank shareholders, largest
junior creditors, senior bondholders
and ultimately the unsecured depositors, over than EUR 100,000, so
those owning deposits well above
the amount guaranteed by the European legislation, in case of bank
failure. According to French Finance
Minister, Mr. Moscovici, “this is a
drastic change, a shift from public funds
to contributors/depositors’ money, from
national budgets to the financial sector
itself, which should be able to solve problems by themselves.” Meanwhile, the
Italian Minister of Economy, Mr. Saccomani also notes that “it is an important compromise, which contributes to
cracking the dangerous binomial: banking risk - sovereign debt risk.” Europe
wants to move form the concept and
practice of external support (bail out),
to the “rescue from within - bail in”.
Typically, it managed to establish
a defense system which combines a
new framework of unique rules with
the necessary flexibility that keeps
into account national features. As
in the case of “European recipe” to
weather Cypriot crisis, which practically caused many controversies and
suspicions about speculative movements and transfers between banks
in different countries or continents,
deposits up to EUR 100,000 would, in
any case, be guaranteed and rescued.
During discussions on this important decision, EU countries were positioned in two opposing views: the
first group, represented by France,
Italy, Sweden and the UK, defended
the position that “we cannot be so drastic on a common rigid rule, rather we
must accept some flexibility on a caseby-case basis for various banks and EU
countries.” France insisted especially
on “the protection the individual depositors and SMEs deposits must enjoy “, by
exempting them from facing bankruptcy
or restructuring costs”. On the other
hand, was Germany, Netherlands
and Finland, who held the position
that “the rules should be such rigorous and unique for all EU countries, in
order to avoid any confusion, in about
banking risk and any other speculative
investment or deposit movement, from
one country to another”, so as to discourage at maximum “the resort to
public money”. According to German
Chancellor, Angela Merkel “too big to
fail blackmail cannot force member
states endlessly to recapitalize banks
with billions of euros of public money”. Nordic countries were “more de-
termined to take out the word “progress”
in the ongoing process of European banking union, unless they see private investors’ commitment and involvement in
the process.”
Countries in favor of flexibility
were bound to accept the rule to force
bank shareholders and biggest creditors accept paying at least 8% of the
bank liability, in case of restructuring
or liquidation. Should this condition
be satisfied, then the bank can hope
any intervention from “national rescue fund”, or if necessary even “other
European or national financial resources”, whose main purpose would be
“bank’s direct recapitalization through
ESM (European Stability Mechanism).”
In all cases, it is concluded that
such type of intervention cannot be
greater than 5% of bank liabilities.
Intervention modalities of ESM and
Eurozone’s rescue fund have been a
constant “disputing point”, between
France and Germany. The key stalemate consisted in finding coherence
between applying a direct mechanism for banks’ recapitalization
through ESM and excluding ESM
from the national flexibility game. As
Germans excluded every rescue with
public funds, the Frenchmen sought
possible opportunities that, in special
cases, ESM could be activated, in order to help troubled banks.
In conclusion, it appears that the
agreement makes room for a possible protection of deposits exceeding
EUR 100,000, and SMEs full deposits.
Should bank losses be greater than
8% of their liabilities, losses which
are paid by shareholders and major investors in these banks, then it
is possible (in exceptional cases) for
ESM to enter in, thus not extending
the obligation at covering losses of
depositors, either those with deposits
over EUR 100,000. But as per above
mentioned, such intervention cannot
be greater than 5% of banks’ liabilities, as closely related to the degree of
flexibility, given to each member, in
resolving banking crises in the context of the adoption of the Directive
“Bank Recovery and Resolution Directive (BRRD)”. This agreement is considered as the most important stage
towards European banking union,
paving the way for next stage, that
of creating a European regulatory
mechanism for banks (Single Resolution Mechanism, SRM).
Social Capital
Alpha Bank - Albania
“Together the future is more beautiful”
On the occasion of “Alpha Bank’s Volunteer Day”, bank’s employees visited, on
on 26 May 2013, the paediatric hospitals in Vlora, Durres, Kukes and Librazhd.
The bank helped in restructuring hospital premises and also donated various
equipments. Mr Periklis Drougkas, CEO of Alpha Bank Albania, said that it is important
that everyone volunteer in such good cases and he hopes this activity will attract the much
needed attention, so other important actors will contribute as well to further improve the
hospital conditions in Albania.
Tirana International Guitar Festival
Alpha Bank Albania was one of the sponsors of the 1st Tirana International Guitar Festival
& Competition, held on May 2013 at the premises of Tirana University of the Arts. In
this event performed more than 60 artists and students from USA, Austria, Belgium,
Germany, Switzerland, Albania, Thailand, Croatia, Montenegro and Kosovo.
BKT
BKT supports the exhibition “Time and Places: Istanbul - Art Collection of the
Central Bank of the Republic of Turkey”
On 30 May 2013, at the premises of the National Gallery of Arts, was opened the
exhibition “Time and Places: Istanbul - Art Collection of the Central Bank of the
Republic of Turkey”, a joint exhibition of the Albanian National Gallery of Arts, the
Central Bank of the Republic of Turkey, “Yunus Emre” Culture Institute and BKT.
BKT supports the touristic season: “Summer 2013” in Orikum
On 1 June 2013, the Orikum Municipality launched the official opening of the touristic
season, “Summer 2013”. This activity was sponsored by BKT and some other sponsors and
was supported by the Ministry of Agriculture, Food and Consumer Protection.
Credins Bank
People in need- As annual tradition Credins Bank supported people in need by providing considerable
food assistance for Red Cross in Shkodra.
Community- Credins Bank supported the construction of a leisure park at the entrance of the city of
Kavaja.
Institutions - Credins Bank supports financially the activity of public institutions, as following: the Lezha
Municipality, the Social Service and the “Shefqet Ndroqi” hospital.
Sport – The bank supported the city of Vlora and “Flamurtari” basketball team. Also, it must be noted the
financial support to National Championship of Boxing, the “Heart of Tirana” Cup, the men’s volleyball
team “Studenti” and women’s volleyball team “Tirana”.
Credit Agricole
Children’s Festival Art
Credit Agricole Albania supported this year the Children’s Festival Art, organized
on 25 May 2013. This year’s edition took place at the Palace of Culture in Kamza
and was attended by children in need. During the activity, a competition was
organized, with the theme: “My art, like a journey”. Children of 7 to 15 years old
were divided into 4 groups under the supervision of 4 artists. The group of older ages
was focused outside the Palace of Culture, aiming at making the environment a more
beautiful place, through painting.
Intesa Sanpaolo BANK - aLBANIA
“Live Art” - Contemporary Art Painting Contest
Intesa Sanpaolo Bank Albania organized the first Contemporary Art Painting
Contest “Live Art”. Following the first round of evaluation, the international jury
will select 25 finalists, whose paintings will be part of 5 exhibitions in the biggest
cities of the country. The bank, through this contest, enhances the power of ART
to create, transfer and preserve the values of the society, affirming as well its
transformation power.
Event on “Orphan’s Day” - Intesa Sanpaolo Bank Albania supported the
organization of a special lunch for the 125 kids of the policemen who died on duty.
The event was organized on the occasion of “Orphan’s Day”, 20 May 2013, by the NGO
“Martyrs of State Police”, where 267 families are members there.
“Albanians for each other” – Donation initiative for children in need - For
the second consecutive year, the bank employees participated in the initiative
organized by Albanian Qatar Foundation to help orphan children and families
in need, by donating clothes, books, games and equipments. Many colleagues
donated what they could and the bank donated 30 books to start the first steps
for the financial education of these kids: “What Banks do? How to Spend Money?
How to Save Money?”
Voluntary Blood Donators Group of Intesa Sanpaolo Bank Albania – On 30 and 31
May in the two of biggest branches of the Bank: Head Office and “Rr.Barrikadave”
Branch, more than 26 colleagues donated blood for kids with “Thalassemia” under
the slogan: “Donate Blood to Save a Life! Best Gift for June 1st”.
“Work & Study” Fair on 4-6 April, 2013 - Intesa Sanpaolo Bank Albania, presented
the job opportunities for students and specialists in IT and Retail area, as well as
the ongoing internship programs offered. The bank supports continuously qualified
human resources offering them further professional development possibilities.
World Environment Day – The two-week campaign, addressed to customers and employees
to raise the awareness on the topic selected this year by UN, “Think-Eat-Save” was organized in
full accordance with the images of the UN campaign. The selected expressions were translated
into Albanian to attract easily the attention of Albanian consumer, through the web banner in the
bank website and posters, posted in all its branches.
ProCredit Bank
ProCredit Bank celebrates June 1st
In occasion of June 1st, ProCredit Bank organized different activities with children
and parents. These activities aimed at emphasising the importance of long-term
savings, as part of Financial Education, which is one of the main pillars of ProCredit
Bank approach. Through interactive games and “ProKid squirrel”, it was explained
to the children the importance of savings at future plans implementation.
“Open meetings” at ProCredit Bank
On 31 May 2013, ProCredit Bank organized open meetings at the premises of its Head Office.
During the meetings, every interested candidate has been informed about the “Young Bankers
Program” which is the only opportunity to be employed at ProCredit Bank.
Raiffeisen Bank
Raiffeisen Bank supports the cleaning of Spille Beach
Raiffeisen Bank supported, for the fifth consecutive year, the initiative
undertaken by the Free Thought Forum on cleaning of beaches. This year, on
June 1st, the Raiffeisen Bank employees in Durres and Divjaka, along with the
Volunteer Core cleaned the Spille Beaches in Kavaja.
A BAnKEr in First PErson
TIRAnA BAnk
BRunIldA HAlIlI
Branch Manager of Tirana Bank,
librazhd
International Boxing Memorial, Vllaznia 2013
Tirana Bank supported, for the second time, the organization
of the “International Boxing Memorial, Vllaznia 2013”, in the
city of Shkodra with the participation of 110 boxers from 11
different countries. This event is organized in memory of
deceased sport personalities of all times.
Job Fair at European University of Tirana and University of
New York in Tirana
On 16 and 23 May, a job fair was held at the European
University of Tirana and University of New York in Tirana
(UNYT) respectively. Tirana Bank as an active participant in
job fairs organized by various universities advised the students
and the best ones are recruited. The fourth year students and
those completing their Master studies in these universities had
the opportunity to submit their CVs and be interviewed by the
human resources staff of Tirana Bank.
Tirana Bank wishes good luck to all the students who
participated in these events.
VEnETo BAnkA
Veneto Banka back again in Himara – In the course of
supporting and cooperating with Himara Municipality,
Veneto Banka was one of the sponsors of the opening of the
touristic season. Thë bank, also, is the official sponsor of
volleyball team “Himara Volley”.
Veneto Banka promotes volleyball - Veneto Banka sponsored
women’s volleyball playoff match between “Marin Barleti
Volley” and “Tirana”, where “Tirana” team was crown as
national champion.
Veneto Banka at Job Fair – Veneto Banka participated on the
third edition of Job Fair, organized from Ministry of Labour
and Social Affair, at the Palace of Congresses. The expansion
of the Veneto Banka network requires more human resources.
D
espite the workload, Brunilda is always trying
to organize her day, in order to find time for her
passion, folk dancing. Brunilda is the manager of the
Librazhdi folk group and the daughter of the great
choreographer Sadi Halili, which is also the name of
the group. “Sadi Halili Ensemble” was established
in 1969 and has participated in various national and
international competing events and festivals, from
which she has always been awarded with different
prizes and festival cups. The ensemble consists of 70
dancers, ranging from 5 to 25 years old.
From 11 to 13 May 2013, the ensemble attended,
for the seventh consecutive year, the “Aulona Folk
Fest” in the city of Vlora, a Balkan festival attended
by ensembles from different countries, like: Bulgaria,
Croatia, Kosovo, Montenegro, Macedonia and many
others. This year, it was for the Librazhd ensemble
group which represented Albania in this festival and
it was awarded with the prize: “Best Performance”.
Brunilda has been a folk dancer since the age of 6
and from 1997 onwards she has been the assistant
choreographer of her father and the ensemble’s
manager. She has represented Albania in festivals
in many countries such as: Italy, Greece, Germany,
France, Turkey, Austria, Bulgaria, Macedonia,
Kosovo, Montenegro, Switzerland, Poland, etc.
BAlKAnnEt
inTeRBalkan neWs
BoSnIA-HERZEgoVInA
Sarajevo
The IMF will disburse 39 million euros to Bosnia-Herzegovina
Balkans.com - 07.05.2013
The International Monetary Fund will disburse 39 million
euros (US$51 million) to Bosnia-Herzegovina, as part of
a stand-by loan program to help the country overhaul its
economy and stabilize public finances. The IMF urged the
government to keep spending tight this year to ensure fiscal consolidation.
Banking sector in Bosnia and Herzegovina keeps its stability
Despite difficult conditions and all negative impacts,
banking sector in Federation BIH kept its stability, in the
first quarter of the year. Loans at the end of first quarter
were 10.7 billion KM and their share in assets increased
by 1.1 percentage points and amounted to 72.2%.Total
capital grew 1.8%. It is evident that total profitability improved compared to last year, which is primarily a result
of new methodology approach (implementation of MRS
37-39).
BulgARIA
Sofia
The share of bad and restructured credits in the Bulgarian banking system has increased
In April, the share of bad and restructured credits in the
Bulgarian banking system has increased once again following a particular period of decline. Their share from
the total of loans issued to business and households
(overdrafts excluded) surged by 0.7% to 23.2%. The rise is
mainly due to the problematic debts of companies (in the
non-financial sector) that gained 25.5%.
Bulgaria will maintain the limitations on the funds of
state-owned companies in commercial banks
Focus - 13.06.2013
The Bulgarian government of PM Plamen Oresharski will
maintain the limitations on the funds of state-owned companies in commercial banks introduced by the interim
cabinet at least until the end of the 6-month transition period, during which the companies must enforce them. The
new rules require that the net exposure of a company do
not exceed 25% of its available capital. It turned out that
the concentration of funds reaches 100% for some com-
panies, while some of the most favorite banks of stateowned companies are Corporate Commercial Bank and
Central Cooperative Bank. The condition of the banking
system and the share of bad loans became a topic of discussion at the Bulgarian Parliament.
CRoATIA
Zagreb
S&P: Slovenian, Bulgarian and Croatian Banks among
the weakest in the Region
Central and Eastern European banks face a difficult year,
with those in Hungary, Slovenia, Bulgaria and Croatia
among the weakest, according to a sector report published by credit-rating agency Standard and Poor’s. “The
region’s banks will likely continue to suffer from high levels of bad loans and credit losses, weak credit demands
and compressed margins,” S&P wrote in its report Central and Eastern European Banking Outlook 2013: Another Tough Year in a Weak Economic Climate.
Croatia would keep the national currency and is in no
hurry to introduce euro
NZ week - 10.05.2013
Croatia would keep the national currency and is in no
hurry to introduce euro before preparation well, the
country’s First Deputy Prime Minister Vesna Pusic said.
It would be better to go slow and prepare well, said Pusic,
who is also Minister of Foreign Affairs and European Af-
fairs. Croatia, who will become the 28th member of the
European Union on July 1 this year, has suffered from
recession for years with businesses reduction and unemployment reaching over 20 percent.
gREECE
Athens
aim of the Memorandum is to establish the nature and
the level of cooperation and coordination between CBK
and FIUK and as well explain their expectations and aims.
Meanwhile the memorandum enables the facilitations
of information exchange between the two institutions;
increases the level of cooperation and coordination; improves the level of security and accelerates the process the
information exchange between the parties, related to the
prevention and fighting of money laundering and terrorism financing.
MACEdonIA
Greece is recapitalizing its four big banks
City A.M. - 22.05.2013
Greece’s bank rescue fund will aim to sell Hellenic Postbank and Proton by mid-July with big banks continuing
to absorb small lenders as part of plans to revive the battered sector, the country’s foreign lenders said in an inspection review. Greece is recapitalizing its four big banks
and winding down others deemed non-viable to improve
the sector’s capacity to fund the economy out of a deep
six-year recession.
First ever EIB trade facility provided to Greece
Balkans.com, Ekathimerini - 13.06.2013
The European Investment Bank (EIB) provides up to EUR
500 million for trade finance to support foreign trade
oriented SMEs in Greece. The finance agreements were
signed with three systemic Greek banks (National Bank
of Greece S.A., Piraeus Bank S.A., and Eurobank Egasias
S.A.) and three foreign banks (Corporate and Investment
Banking, HSBC Greece, and Commerzbank AG).
koSoVo
Pristina
Assignment of Special Country Code for Republic of
Kosovo by SWIFT
BQK– 07.05.2013
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has assigned a special country code
to be used in identifying the financial institutions of the
Republic of Kosovo. Meanwhile, on the basis of this particular country code, SWIFT initiated the process of creating
an international identification code - BIC for the Central
Bank of Kosovo (CBK) and its connection to the SWIFT
system. SWIFT’s decision for using a particular country
code for the Republic of Kosovo was taken in response to
the respective CBK request, which was supported by the
central banks of the G-10 as well as International Monetary Fund and World Bank.
Signed the memorandum of understanding between
Central Bank of Kosovo and Financial Intelligence Unit
of Kosovo
BQK-12.06.2013
Central Bank and Financial Intelligence Unit of Kosovo
(FIUK signed the Memorandum of Understanding. The
Skopje
FYR Macedonia urges businesses to apply for loans
with subsidized interest
FYR Macedonia’s Economy Minister Valon Saracini urged
businesses to apply for loans with subsidized interest
from MBPR. According to the latest information added,
companies have used 61 million from the last credit line
from the European Investment Bank of 100 million euros
is credited with over 200 projects. “The realization of the
amount of 100 million euros will be open 1,300 new jobs.
This shows that the interest for credit lines of a simple
reason, cheaper source of funding in this case is the interest
rate of 5.5 percent, said the minister. Sarachini Minister
urges companies to take advantages of the Shareholders
for the borrowing procedure, the most lasting 45-60 days.
KDB Bank plans to open branches in Romania, Serbia,
Croatia, Greece, FYR Macedonia
BBJ - 29.05.2013
The state-owned Korea Development Bank has renamed
its unit in Hungary KDB Bank Europa and wants to
use it as a base for expansion in the region, told news
agency MTI. KDB Bank wants KDB Bank Europa to
open branches in Slovakia, the Czech Republic, Austria,
Romania, Moldova, Serbia, Croatia, Ukraine, Russia, FYR
Macedonia and Greece by 2018.
MonTEnEgRo
Podgorica
The banking sectors in the CEE region continue to
outperform their Western European counterparts
In terms of growth and profit, the banking sectors in
the CEE region continue to outperform their Western
European counterparts. Total 2012 loan growth in CEE
came in at 14.8% yoy in EUR-terms. Another year of
expansion brings the cumulative 2010-2012 real loan
growth in CEE to 21.8%; in the Eurozone real loan growth
was negative over the same period of time. Banks in
CEE continue to benefit from growth opportunities and
margins that are significantly higher than in Western
Europe.
Montenegro hires banks to lead an international bond
issue
Reuters - 29.05.2013
The Republic of Montenegro, rated Ba3/BB-, has
hired Citigroup, Deutsche Bank and Erste to lead an
international bond issue, according to two sources. The
sovereign is looking to bring the new bond to market in
mid-June, one of the two sources said.
RoMAnIA
Bucharest
growth as price pressures ease, a survey of economists
showed. The Narodna Banka Srbije will cut the benchmark
one-week repurchase rate by a quarter-point to 11.50
percent, according to 11 of 23 economists in a Bloomberg
survey. Serbian monetary policy is set to follow the rest
of Eastern Europe, where borrowing costs are falling to
bolster flagging economic growth.
Central Bank of Serbia adopts amendments and
supplements in the legislation for banking supervision
Central Bank of Serbia; Balkans.com - 20.05.2013
Central Bank of Serbia adopted amendments and
supplements in the legislation for banking supervision
related to Granting of a Preliminary Bank Founding
Permit, Bank Operating License and Consents by the
National Bank of Serbia, as well as the Provisions Relating
to the Establishment of Criteria for Defining a First-Class
Bank. Additionally, the Decision on Risk Management
was amended to permit banks to assign receivables from
legal entities and entrepreneurs (due and not yet due) to
other banks.
TuRkEY
Intesa Sanpaolo Bank Romania introduces U Turn tax
refund service for corporate customers
Business Review - 24.05.2013
Intesa Sanpaolo Bank Romania, has made a local agreement with U Turn Tax Refund (UTTR) in order to facilitate VAT refund. The reimbursement time can be reduced
for only up to five working days. Types of expenses that
can be reclaimed from over 40 countries worldwide, covering all European Union member states, Norway, Switzerland, Canada, Australia and Japan include: hotels
& other forms of accommodation, restaurant meals, car
rental and maintenance, taxis and public transport, petrol
/ diesel fuel, conference, trade fair and exhibitions, training courses and seminars.
Bank interest rates are seeing a downward trend in Romania
Bank interest rates are seeing a downward trend in Romania, while crediting is almost blocked. According to
bankers, the resumption of individual crediting can be
done only after a few successive quarters of steady economic growth followed by the banks’ major involvement
in crediting companies.
SERBIA
Beograd
Serbia’s central bank will probably lower borrowing
costs
Bloomberg - 14.05.2013
Serbia’s central bank will probably lower borrowing costs
for the first time since January 2012 to spur economic
Istanbul
Turkey has begun to open the doors to giving new
banking licenses
Trend.az - 13.05.2013
Turkey has begun to open the doors to giving new banking licenses after the 2001 banking crisis, with no exception for interest-free Islamic banks. Turkish Deputy Prime
Minister Ali Babacan said at the Turkish Participation
Banks Union’s annual meeting that it appeared the format of two participation banks would be clearer in a few
months. The state-run banks, Ziraat Bank and Halkbank,
will establish these two participation banks.
Online payments by bank cards grew by a third in 2012
The recent “Europe Online Payment Methods Report
2013 – First Half 2013” report by Hamburg-based secondary market research company yStats.com provides information about the movement toward online and mobile
purchase transactions. According to the report in Central
Europe, awareness of mobile payment methods was relatively high in 2012. In Western Europe, the United Kingdom and France are on the path to adoption of alternative
payment methods. Countries in Eastern Europe are also
participating in the movement to online and mobile payments. In Turkey, online payments by bank cards grew by
a third in 2012. Mobile payments were also on the rise in
Turkey, reaching a high double digit number in millions
of Euros.
Tech Topics
E-COMMERCE –
A tangible reality in Albania
E-Commerce is the latest service offered by
Credins Bank, through which clients are
provided with the opportunity to sell online and
accept payments with VISA cards, issued locally
or worldwide, and accessed through internet.
by Ms Marsela KUSHTA
Chief of Operations Sector
Cards Department, CREDINS BANK
C
redins Bank has made continuous efforts to be at the forefront
of achievements of the Albanian
banking system and industry, by
achieving significant growth in all
areas and indicators. Credins Bank
has expanded its range of products
and services in the area of electronic
payments, thus increasing its presence in the Albanian banking market.
Given the comfort, safety, speed and
efficiency, new forms of electronic
payments provide, as compared to
cash, checks, etc., Credins Bank has
been continuously introducing new
technologies in this field. Thus, Credins Bank, in the frame of supporting business and responding to the
growing demands by customers,
decided to introduce a new service
in banking market, e-Commerce, thus
being among the first banks in Albania to take this initiative. Considering bank’s high indicators as card
issuer and its expanding position in
the market, VISA has granted Credins Bank the license for e-Commerce
and POS Merchant Acquiring. These
services are expected to improve all
indicators, either as card issuer, or as
a receiver of card transactions. Therefore, bank’s customers will benefit
from advantages of one of the most
contemporary alternatives in the
electronic payment system.
Card transactions executed through e-Commerce contain sensitive information, as opposed to face-to-face
transactions, thus carrying a higher
risk, not only for the card holder,
but also for the business. Bank customers, which in this case are merchants which offer their products
and services online, but also those
who buy online, by using their VISA
cards, have the right to claim comfort, convenience, speed of service
offered, without compromising data
confidentiality and security. In order
to provide customers with the necessary security in offering products
and services online, VISA, as a highly
trusted payment system in the whole
world, has created an added to eCommerce, through VbV (Verified by
VISA) technology, which provides a
safe service and protection from unauthorized use of cardholders’ personal data. The application of VbV
technology for Credins Bank customers (merchants seeking to sell online)
is mandatory, so the bank does not
accept offering e-Commerce service
to clients who are not involved in
the VbV technology, as a key condition for a safe and quality service,
through which cardholder customers
buy online, with the trust that the service security is merchant’s one of key
priorities. Such technology enables
the identification of cardholder who
effects payment through merchant’s
website, by providing full security
for online purchases. Online transactions through VbV are authorized
after authenticating them via a password, only.
The decision-making process for
an e-Commerce service goes through
a careful analysis process, which
involves various specialists, by following strict procedures and specific
requirements for this service. Also,
the bank sets specific standards and
carries out relevant controls to verify
their proper implementation by the
client (merchant who sells online).
The page, through which products
and services are sold online, must
be user friendly and also reflect the
transparency requirements under
which the product or service is offered. Also, the page must contain
detailed prescriptions for goods or
services, a clear information about the
Currently, there are
hundreds of websites
that support online
sale of a product or
service specified and
also hundreds (if not
thousands) of others
expected to enter in
the online business.
Figures and statistics
show a double-digit
growth every year.
return and refund policies for goods
and services, deadlines and restrictions, the final price of the product or
service offered (including transportation, taxes, etc.), merchant’s full and
correct name, contact numbers for
service and customer care, etc. Amazon is probably the best example how
a site could offer such a quality and
professional service as, by adapting
to customers’ individual preferences.
A key role in the success of the
merchant which provides e-Commerce, plays the website design, but
above all, its functionality and performance. It has been proved that
any delay in opening the site or difficulties in its use, translates into an
“abandonment” coefficient of the
site by users, and surely, this hurts
merchant’s business and image. In
building the website, it should be
noted that, the merchant is offering
a virtual product or service, which is
more difficult to be perceived by the
client, rather than when buying it in
a physical shop. This often requires a
clear and complete visual appearance
of product or service, its detailed prescription, its characteristics’ categorization, to increase customer confidence through online shopping.
Selling online is a convenient solution, not only for large companies
with prestigious brands, but also for
smaller businesses, which send products/services to the most remote purchaser. Every registered and licensed
business, seeking to sell its products or services online, constitutes a
potential customer for e-Commerce.
The merchant who owns a website,
compliant with a set of required
standards to provide such service, is
qualified to accept online payments
with VISA cards, which go to the
merchant’s account at Credins Bank;
should the merchant comply with
the predetermined requirements (in
accordance with VISA and Credins
Bank’s policies and procedures),
have a business relationship with
the bank and apply for the service. A
dedicated menu is therefore installed
in the merchant’s website, where
customers can effect payments, after choosing the desired product/
service. Its installation is realized in
cooperation with the merchant, and
those interested businesses which are
customers of the bank, are provided
with necessary technical assistance.
The websites of business, which are
Credins Bank’s clients and which
have a business bank account, offer
purchase opportunities for clients
with VISA cards, issued worldwide.
Any business could get information
about the payments made on its account with Credins Bank, through
a monthly transaction statement, or
through e-banking.
Currently, there are hundreds of
websites that support online sale of a
product or service specified and also
hundreds (if not thousands) of others
expected to enter in the online busi-
ness. Figures and statistics show a
double-digit growth every year. The
service is provided through internet,
thus having the minimum requirements for initial investment and
infrastructure, thus making “online
trade” an attractive option for many
businesses. This is why the number
of businesses that sell online and the
number of customers who buy online
grows every day. Today, E-Commerce
is a multibillion-dollar industry, with
an ever-growing trend.
WHAT IS E-COMMERCE?
E-Commerce means accepting payments in the electronic trade, which
enable businesses the opportunity to offer products and services to
their clients, through internet. Businesses sell products and services
through their website, by accepting clients’ payments with cards.
E-Commerce transactions are effected online, by way of using an
access device from the cardholder client (computer or other terminal),
in which the necessary data are entered in, to effect the transaction.
The client initiates the transaction by uploading card data, used as a
payment instrument, to bouy the product or service online, through
merchant’s website. Through e-Commerce businesses may sell more,
with increased security, faster, better, cheaper and without time and
distance limits and boundaries.
Financial Auditorium
The usage of payment instruments
by individuals and bussinesses
A general overview of two studies of Bank of Albania1
Mr Kliti Ceca
Head of Economic Research Sector
Research Department,
Bank of Albania
O
Ms Valentina Semi,
Head of Policy and Payment System
Oversight Sector.
Department of Payment Systems
Bank of Albania
ne of the objectives set by Bank
of Albania is encouraging a normal functioning of payment systems.
On the other hand, maintaining and
promoting security, efficiency and
stability of payment systems is a
crucial precondition for an efficient
implementation of monetary policy
and maintaining financial stability. In
this regard, Bank of Albania has been
paying a special attention to payment
instruments, as they are an integral
part of payment systems. Furthermore, based on international literature, it is noted that the use of electronic payment instruments shows a
negative correlation to the use of cash
in economy, thus having a direct impact on the implementation of monetary policy and the financial stability.
Because of relatively low volumes of
payments through electronic instruments, Bank of Albania is paying
special attention to the studying part
of payment instruments, along with
measures regarding the improvement of regulatory and legal frame1
Mr Alban Pllaha
Specialist, Unit of Methodological
Research in Micro Data,
Research Department,
Bank of Albania
work as well as the infrastructural
developments, with the aim to support considerably the decision-making process and reforms foreseen in
the area of payment systems.
During the period February –
March 2012, two surveys were conducted, in the frame of assessing opinions of users of payments instruments,
where different issues related to these
instruments were estimated. The surveys were conducted by Bank of Albania, drafted and developed as scientific projects by Research Department, with the support of Payment
Systems Department and Statistic
Department of Bank of Albania and
practically implemented by INSTAT.
The first survey was conducted
with individuals, who have a bank account. The sample of 200 individuals
was selected in Tirana – Durrës area,
as an area with the largest population density. The survey aimed at
identifying individuals’ characteristics, which have a positive or negative impact on their use of payment
instruments.
The second survey was conducted with businesses. The basic selecting condition was the fact of including 200 businesses, which offer payments through POS, and also including 200 businesses, that do not offer
such payments. This made possible
to make necessary assessments for
each groups, and on the other hand,
it enabled the comparative analysis
between groups. This survey aimed
to identify the main businesses features, which influence, positively or
negatively, on the use of payment instruments.
It must be emphasized that both
studies were based on public surveys. They reflects evaluations given
by individuals and businesses, about
the questions they were asked in this
regard.
Deepening
financial literacy to
enhance financial
culture and turn
it into a general
culture, is a finding
that supports
Bank of Albania’s
incentive for
several years from
now to further
increase the
financial literacy of
the public.
The views expressed herein are solely those of the authors and do not necessarily reflect the views of the Bank of Albania.
Complete information about the
studies
The surveys analyses are published
by Bank of Albania in its scientific
journal: “Scientific Papers” and they
are currently available in print and
electronic version on Bank of Albania
webpage2.
Main findings of the surveys
Some of the main findings of the individuals’ survey are as follows:
Deepening financial literacy to enhance financial culture and turning it
into a general culture. Several issues of
this survey show explicitly that the
deepening of financial literacy is directly related to using bank accounts
and payment instruments. This finding supports Bank of Albania’s incentive for several years from now to
further increase the financial literacy
of the public.
Monitoring financial literacy of the
general public. Monitoring this financial literacy by using different methods, including surveys, would determine the concrete manner and issues
in focus for the public education.
Deeper monitoring of bank instrument fees and their distribution. The
survey highlighted the respondents’
relatively lack of knowledge on fees
involved in various payment instruments. So, the Bank of Albania’s initiative to undertake a unified publication of these database is deemed
as positive, has created the preconditions to better inform the general
public on the issue, that, and has
enabled individuals and businesses
to make wise selection of banking
services that would better suit their
interest. This initiative would also
facilitate fee monitoring, for research
and administrative purposes.
Deeper perception of issues on transparency about bank instrument provision and usage. As regards the transparency about cashless payment
system, respondents stated the need
for more transparency about these
instruments. This may also be due
to lack of information. However, it is
deemed that transparency helps increasing public information, as well.
Some of the main findings of the survey with businesses
The most acceptable payment instruments by businesses (except credit or debit cards, as initial condition on
the realization of businesses selection), are as follows:
“Credit Transfer” with 40.57 %.
The relatively high usage of this instrument, is in compliance with our expectations,
because this type of instrument by its nature could be considered as widely used in
business transactions, compared to individual transactions.
“Direct Debiting” with 25.71 %.
Regarding the relatively high usage of this instrument we estimate that, beyond
the considerable percentage of the utilities companies included in the survey, a
limited familiarization of businesses with this instrument could be noted, which is
confirmed also by businesses’ responses related to the acceptance of the instrument
for payments which are not possible to be made through this instrument. The usage,
somewhat prolonged, of direct debiting, makes its accurate recognition somewhat
doubtful, thus favoring the need for deepening the financial literacy
“Cheque” acceptance with 14.39 %
“E-banking” with 13.21 %
- Businesses which accept payments through POS, estimate that
the the elements with the highest impact on adopting these terminals to make payments, are:
“security level” and “reliability”.
Meanwhile, “the easy integration on business system” and the
“easiness in use” are estimated as
two other features that have contributed significantly on adopting these terminals. It seems that
“Costs” have not so much impact
on POS adoption, regarding this
business category.
These data confirm the low percentage, such category of instruments has over total
instruments, according to the data reported to Bank of Albania3.
- Businesses that do not accept payments via POS, evaluate that will
adopt these way of payments, if
more consumers would ask them.
- The most evaluated feature of the
payment instruments, by businesses, are: “Kontact with the
market: The relevance of number
of buyers who use these systems”,
and “The confidence: How confident you feel with these systems”,
which is also assessed as “very
important”.
- The least evaluated feature of the
payment instruments, by busi-
nesses, are: “Relative advantage
of the price: The amount of money
you save by using these payment
terminals”, and “Market presence: Have you listen about these
payment instruments”, which is
also assessed as “less important”.
- High fees for POS usage. It is assessed that such claims could be
raised by small businesses, for
which POS costs, in the frame of
low costs of cash usage, could be
pervasive.
2 “Survey report on the use of payment instruments – Businesses, 2013, “Discussion Paper 01 (60) 2013”, K. Ceca, A Pllaha, V. Semi.
Albanian: ttp://www.bankofalbania.org/web/Raporti_i_anketimit_mbi_perdorimin_e_instrumenteve_te_pageses_ndash_Bizneset_6581_1.php
“Survey report on the use of payment instruments – Individuals, 2013, “Discussion Paper 02 (61) 2013”, K. Ceca, A Pllaha, V. Semi.
Albanian: http://www.bankofalbania.org/web/Raporti_i_anketimit_mbi_perdorimin_e_instrumenteve_te_pageses_ndash_Individet_6582_1.php
English: http://www.bankofalbania.org/web/Survey_report_on_the_use_of_payment_instruments_individuals_6582_2.php
3 Bank of Albania, Annual Report 2011, page 148.
AAB
AAB Activities
AAB - on financial education
Bank Cards brochure
AAB, in cooperation with Bank of Albania, prepared a brochure on credit
cards and their usage, as part of the Financial Education Campaign,
undertaken by AAB. The brochure includes information on bank cards,
interest rates, transparency standards and advices on the appropriate use of
cards through internet. The brochures are being distributed to the students,
to the branches of banks, commercial centers etc.
Visits of students at banks premises
In view of the collaboration between AAB and the
European University of Tirana (UET), Ms Endrita
Xhaferaj, AAB Secretary General and Ms Najada
Xhaxha (Tirana Bank) Head of the AAB Payments
Systems Committee, delivered two seminars for
students, on banking and operational issues, as
part of the curricula of graduating bachelor in
Banking and Finance.
Following up on those seminars, AAB organized
tours in some of the banks’ branches in Tirana, as
part of students’ practical learning, from 24 June
until 01 July. Bank representatives explained to
the students the daily activities of banks including
branches and other departments. The banks which
welcomed the students were: Alpha Bank, BKT,
Credins Bank, FIBank, Intesa San Paolo Bank,
NBG Bank Albania and United Bank of Albania.
AAB - Events
3rd Albanian National Card Forum, 17 May 2013
AAB and its Anti-Fraud Card Committee organized for the third
consecutive year the 3rd Albanian National Card Forum entitled: “The
dynamic future of business”. The forum was held in Sheraton Hotel, Tirana.
It was attended by representatives from commercial banks in Albania and
Kosovo, Bank of Albania, Visa and Master Card representatives, Albanian
and Kosovo State Police, OPDAT, local and international companies,
which provide technology services in electronic payments services such
as: INFIGO, Mellon, Printec, Asseco, EasyPay, and MPay, etc.. This year’s
forum emphasised the analysis of the market and the latest developments
in cards and payments industry, both from the viewpoint of growth and
development opportunities of card business, as well as the risks associated
to it.
2nd National Forum on Bank Security, 31 May 2013
AAB and its Bank Security Committee organized the 2nd
National Forum on Bank Security, held for the second
consecutive year at Tirana International Hotel. It was
attended by representatives from commercial banks in
Albania and Kosovo, Bank of Albania, General Directorate
of State Police, Physical Defence and Security Companies
(SHRSF), and companies which offer services and products
in the banking security sector.
Roundtable on “The improvement of reporting from banks, in the context of Prevention of Money Laundering and Terrorism financing”, 24
May 2013
AAB in cooperation with the General Directory of the Prevention of
Money Laundry (GDPML) organized a roundtable to discuss on banks’
reporting to the Authority, in accordance with the Law “On the prevention of money laundering and terrorism financing”. The meeting was
attended by GDPML high officials, heads of Compliance Departments
and specialists of prevention of money laundry at commercial banks, and
Bank of Albania’s Supervision Department’ representatives. Participants
in the meeting discussed on specific technical problems encountered in
banks’ reporting and on the best ways to address them in the future.
Workshop on the Renewable Energy Program (BREP), 28 May 2013
IFC and AAB organized a workshop for local commercial banks as a part
of a broader IFC’s Balkan Renewable Energy Program (BREP). The main
objective was to introduce banks with the potential for investments into
renewable energy projects in Albania, as well as the most characteristic
risks associated with such projects. IFC introduced its advisory services
in this field comprising manuals, training and assistance, as well as its
investment services on the development of renewable energy sector.
Representatives of high level management of banks attended the event.
AAB - Trainings
Workshop on “Improving of electronic connection among the
beneficiaries”, 05 April 2013
Training on “Information Security Management”,14-16 May 2013
AAB facilitated the participation of banks’ IT officers in the workshop organized by General Prosecution Office, as part of the twinning project on: “Support to anti-money laundering and financial
crimes investigations structures”. The activity was moderated by
experts of European Community and addressed the best practices
in the cooperation between competent Albanian authorities and
sharing of information amongst them and reporting on technical
requirements for electronic connections.
AAB organized a three-day training course
on Information Security Management. The
objective were to inform the participants
on basic security concepts, qualitative and
quantitative risk management process, etc.
The course was attended by 11 representatives from 8 banks.
Training on “Presentation skills in English”, 15 April, 2013
AAB organized a one-day course on how to present effectively and confidently in English, aiming at teaching
to be able to speak with confidence in front of an audience. This interactive training course was moderated
by Mr. Andy Zdan-Michajlowicz and was attended by 5
representatives of 2 member banks.
Training on Valuation of Immovable Properties, 22-23
May 2013
AAB in collaboration with Deloitte Albania organized
a two-day course on the valuation of immovable
properties including all the process and evaluation
report. The course, attended by 15 persons from 6 banks.
Workshop on Basel III, 13 June 2013
AAB in collaboration with FSVC Program organised the
workshop entitled “An overview of Basel III with regard
to liquidity”. The workshop took place on 13 June 2013,
at Hotel Tirana International. It was moderated from the
Danish Central bank experts specialized in Basel III liquidity risk management and regulation.

alban meka

Transcription

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