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DEVELOPMENT PLAN OF THE BANK OF ALBANIA FOR
2009 – 2011
MEDIUM-TERM
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You may find this brochure in the following address:
www.bankofalbania.org
if you want to receive a hard copy of this brochure, write to us at:
Banka e Shqipërisë, Sheshi “Skënderbej” Nr.1 Tiranë, Shqipëri,Tel.: +355-(0)4-2222152; Faks: +355-(0)4-2223558
or send an e-mail to:
Printed in 700 copies
Printed by ADELprint
The Medium-term Development Plan of the Bank of Albania for �009 – �0�� is approved by Decision No. 50, dated �4.06.�009 of the Supervisory Council of the Bank of Albania
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C O N T E N T S
The future: Pathways and challenges ahead 5
1. Governor’s message 5
2. The Bank’s compass 92.1. The Bank’s commitment to the public 92.2. The Bank’s commitment to excellence 92.3. Commitment to one-another 10
3. Major priorities 113.1. Institutional excellence 113.2. Infrastructural projects 133.3. Work environment excellence 153.4. Financial plan 15
4. Core functions of the Bank of Albania 174.1. Monetary policy 174.2. Statistics 234.3. Research 264.4. Financial Stability 294.5. Currency 374.6. Governance and legal servise 414.7. Human Resources 46
Annex 47
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AD ADMiNiSTrATioN DEPArTMENT
AFD ACCouNTiNg AND FiNANCE DEPArTMENT
FrEiCD ForEigN rELATioNS, EuroPEAN iNTEgrATioN AND CoMMuNiCATioN DEPArTMENT
iAD iNTErNAL AuDiT DEPArTMENT
iD iSSuE DEPArTMENT
iNSTAT iNSTiTuTE oF STATiSTiCS
iTD iNForMATioN TEChNoLogy DEPArTMENT
hrD huMAN rESourCES DEPArTMENT
LD LEgAL DEPArTMENT
MoD MoNETAry oPErATioNS DEPArTMENT
MPD MoNETAry PoLiCy DEPArTMENT
MPiC MoNETAry PoLiCy iMPLEMENTATioN CoMMiTTEE
PSD PAyMENT SySTEM DEPArTMENT
rD rESEArCh DEPArTMENT
STD STATiSTiCS DEPArTMENT
SD SuPErviSioN DEPArTMENT
SPD SECuriTy AND ProTECTioN DEPArTMENT
FSD FiNANCiAL STABiLiTy DEPArTMENT
A B B R E V I A T I O N S
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1THe FuTuRe: PATHWAyS And CHAllenGeS AHeAd
1. GoveRnoR’S MeSSAGe
The new medium-term plan “The future: pathways and challenges ahead” charts the Bank of Albania’s course for 2009 – 2011. This new development strategy of our institution is built on the considerable achievement of objectives stemming from the 2006 – 2008 strategic document. Moreover, it sets out an ambitious agenda for the next planning period.
The document synthesizes a considerable work of all Bank of Albania’s units. It has embodied a great intellectual, scientific and visionary contribution. This document is built upon institutional inheritance and best practices of European central banks and other international institutions.
Our devise for 2009 – 2011, in few words, is: rapid institutional, legal and regulatory approximation with the European System of Central Banks. Efforts to meet this major challenge will affect each of the Bank’s core functions - monetary policy, banking system, payment infrastructure, currency and corporate administration.
For the period ahead we will strive to achieve the major objective springing from the Law “On the Bank of Albania”, i.e., consumer price stability. ” The priority areas of our work are: ensure financial stability of the banking system and efficient operation of the payment system, in all its elements.
We remain committed to:
• ensuring consumer price stability over the medium term - around 3 percent - chiefly by anchoring inflationary expectations;
• guaranteeing smooth functioning and soundness of the banking system at home;
• encouraging further deepening of financial intermediation in the economy;
• developing money market in all its components;• enhancing corporate transparency, constantly adopting most updated
communication and public education practices; • advancing our culture of knowledge sharing;
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• attracting and retaining quality staff; • strengthening administrative capacities and security plans; • ensuring a more suitable structure of cash in the hands of the people,
raising vigilance against counterfeiting.
The meeting of these commitments would further consolidate the public confidence in the Bank of Albania. This credibility enhancement would raise, in turn, the real independence of the institution.
The strategic plan for the period ahead is a joint effort of all the Bank’s staff and departments. Therefore, I would like to thank everyone, feeling confident that their commitment and seriousness represent one of the most precious values of our institution.
Ardian Fullani
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2. THe BAnk’S CoMPASS
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Over the course of 2009 – 2011, the Bank of Albania’s compass will point to rapid approximation with the ESCB standards.
Over the next three years, the Bank of Albania remains committed to consolidating the so-far achievements, further deepening the undertaken reforms, thus playing an important role in promoting the economic and financial welfare of Albania.
2.1. THe BAnk’S CoMMITMenT To THe PuBlIC
Over the next three years, the Bank of Albania will strive to:
• design and implement monetary policies that ensure price stability and foster confidence in the domestic currency;
• develop, promote and supervise safety and efficiency of Albania’s banking system;
• supply quality banknotes and coins;• manage efficiently and transparently the whole financial activity of the
institution; • communicate our objectives openly and stand accountable for our
actions.
2.2. THe BAnk’S CoMMITMenT To exCellenCe
Building on our strengths, we aim to meet our commitment to the public, through an activity based on best central banking standards and practices.
We strive for excellence through intensive research and analysis, through partnerships within the Bank and with international counterparties and other domestic and foreign agencies.
To this end, the Bank of Albania strives to promote:
22. THe BAnk’S CoMPASS
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• innovation in everyday work;• leadership and other incentives that spur on to success;• integrity in business and in decision-making;• diversity of people and ideas.
2.3. CoMMITMenT To one-AnoTHeR
The Bank of Albania will continue to be an institution that aims to attract quality staff. To this end, we aim to achieve our best in a workplace, where we:
• communicate clearly and openly;• share knowledge and experience;• develop talents and careers;• recognize merit and respect one-another for what we do inside and outside
work.
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3.1. InSTITuTIonAl exCellenCe
The Bank of Albania will continue the work for further consolidating its institutional framework. Credibility enhancement remains the final goal for the next three years. Therefore, special emphasis will be laid to inter-institutional relations, particularly with the Parliament of the Republic of Albania and other state agents, including the Albanian executive. The ambition to strengthen its independence requires, above all, consolidation of its alliance with the broad public. To this end, further enhancement of transparency and accountability is deemed as fundamental. Communication with the public and market agents in particular will be further enhanced, adopting best international practices.
3. MAjoR PRIoRITIeS
Current developments and future perspectives have created a complex situation we have to face over the next three years. integration of our economy with the standards and practices pursued by the European union, the European Central Bank and the European System of Central Banks is at the root of our efforts for the period ahead. however, the global developments at the end of �00� have generated more specific concerns, significantly enhancing the need for a greater prudence on both, macroeconomic balances and financial stability of the country.
Therefore, during �009 – �0�� the Bank of Albania will continue to pay special attention to enhancement of its governance and accountability, chiefly through a constantly rising transparency.
rapid advances in technology, markets, instruments, practices and market regulations impose a prudent, timely and pre-emptive attendance.
Due to specific reasons inherited from the past, top priority will be given to renewing our infrastructure in general and improving physical work environment in particular.
To this end, three major objectives, whose accomplishment would assist in successful fulfilment of this strategy, are presented in the following.
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3.2. InFRASTRuCTuRAl PRojeCTS
Several investments in infrastructure are planned as necessary for the Bank of Albania to carry out its activity over the medium term. Investments to simplify and standardize Bank of Albania’s daily activity and significant improvement of staff working conditions constitute the main motivation. Current conditions leave much to be desired, due to passing by of several decades without any essential improvement.
Bank of Albania’s premises • After the completion of the project for upgrading some of Bank of Albania’s
branches, the modernisation of Bank’s headquarters is planned to start in 2009. Along with upgrading the existing building, a new building will be constructed, to better meet the current and future needs.
• Working conditions improvement will be further extended by setting-up a new centre for processing bank notes and coins, while the current activity dynamics has made necessary the purchasing of new premises.
Statistical dataEnhancement of analysing and forecasting capacities of the Bank of Albania
has raised the need for more statistical information, in terms of both, the quantity and the frequency of publication. To this end, the Bank of Albania will play a proactive role and collaborate with all relevant institutions in promoting the national statistics development.
Parallel to that, the Bank of Albania will work for setting up and publishing qualitative indicators to assess the economy performance, financial markets and economic agents’ expectations, mainly through surveys.
legal base• During the medium-term plan period, the work will be focused on improving
the legal framework that regulates Bank of Albania’s activity, with the compass pointing to standards and legislation of the European Union and the European Central Bank.
• The Bank of Albania will be active in improving the law regulating the Deposit Insurance Agency’s activity, while the overall regulatory base of activity and oversight of the banking system and non-bank financial institutions will continue to be subject to constant changes.
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new information technology systems• Information technology aims at further simplifying several work
processes, while further increase of systems’ safety remains a top priority, particularly in the context of transferring the Bank of Albania’s business to other premises.
• Setting up and putting into operation the Monetary Operations Management System remains one of the major objectives. As much important are a number of other projects, highlighting the establishment of an authorised reporting system.
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3.3. WoRk envIRonMenT exCellenCe
Investment in human capacities remains one of our key priorities. Therefore, our policies on human resources aim at a better stratification between manager-employee levels. In particular, we aim to:
• enhance managerial skills; • increase capability to make proper choices and priorities; • raise drafting and implementing capacities of operational plans.
To achieve these goals, it is important to invest in manager and leadership development, knowledge-sharing, recognition and initiatives. These are the main premises to recruit high-quality and dedicated staff.
3.4. FInAnCIAl PlAn
Budget drafting and implementation for an effective and transparent management of the overall financial activity of the institution is the Bank’s medium-term objective in this area. To this end, during the period ahead, much work will be done to achieve the following objectives:
• Enhance cost centre independence; • Set budget by activities; • Standardize budget holding procedures.
These objectives will be achieved by:
• improving the existing regulation on drafting and attending the budget; • improving the existing regulations on specific indicators of the financial
plan, such as fixed assets, staff loans, pension fund; • strengthening the cooperation with cost centres; • improving the existing structure responsible for drafting and attending the
budget.
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4. CoRe FunCTIonS oF THe BAnk oF AlBAnIA
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Desired outcomeThrough its monetary policy stance, the Bank of Albania aims to maintain
price stability in the country, thus contributing to consolidating macroeconomic balances, creating appropriate conditions for long-term economic growth, raising living standards and assisting in the banking system stability.
Strategy to achieve desired outcomePrice stability is achieved through maintaining low-but-positive inflation
rates for a relatively long period of time. This signifies explicit specification and announcement in quantitative terms of inflation target of the Bank of Albania and taking of proper political and operational measures for achieving it.
objective• Maintaining a 3 percent target for inflation, with a tolerance band of +/-1
percentage point is the core objective of monetary policy.
4. CoRe FunCTIonS oF THe BAnk oF AlBAnIA
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4.1. MoneTARy PolICy
Pursuant to Article � of the Law No. ��69, dated ��.��.�99� “on the Bank of Albania”, achievement and maintaining of price stability is defined as the primary target of the Bank of Albania.
While price stability may be regarded as already achieved, the Bank’s monetary policy will be oriented towards maintaining this stability over �009-�0��.
Maintaining price stability and economic development in accordance with its potentials, in the context of increasing exposure to global market, constant development of economic agents and financial market sophistication constitute the challenges that the monetary policy will face during this period.
Monetary policy function is supported, inter alia, by economic and financial statistics, as well as by researches and models that analyse the economy’s performance and strive to predict its future developments.
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• The quantitative inflation target for 2009-2011 will continue to be expressed with the annual change of consumer price index, measured and published by INSTAT.
• To achieve the price stability objective, the optimal monetary policy framework will be adopted, under the circumstances of a free floating exchange rate regime. Regarding inflation targeting as the best monetary policy alternative, the Bank of Albania is working intensively for implementing it formally.
Instruments• The Bank of Albania will continue to be based on market instruments to
achieve its monetary policy objective. • The weekly interest rate of repurchase and reverse repurchase agreements
is the main instrument to be employed for transmitting monetary policy signals.
Priorities• Increase the integration of monetary policy with the fiscal one, constantly
exchanging information and economic analyses at technical level. At political level, the Bank of Albania will insist in adopting a fiscal rule that supports and helps achieve Bank of Albania’s inflation target, positively influencing the country’s economic development.
• Improve further the legal, technical and operational base, to promote trade and competition in the interbank market.
• Enhance research on the Bank’s priority areas. These researches should guide the strategic decision-making of the Bank of Albania in long-term choices of monetary policy regimes, inflation target and framework of instruments that will be employed for achieving them. Also, they should support the political and operational decision-making in determining the monetary policy stance and in using instruments to transmit them to the economy.
• Improve analytical and forecasting models, contributing directly to enhancing their reliability, the decision-making quality and the monetary policy effectiveness in the economy.
• Adapt the time frame of inflation target achievement to duration of transmission mechanism operation, which is constantly improving.
• Develop information base used in decision-making. • Enhance Bank’s communication with the public.
Performance Measures • Achieve the target for consumer price index inflation on an annual basis. • Anchor public expectations regarding inflation around Bank of Albania’s
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target and curtail risk premiums on our national currency. • Assess effectiveness and quality of analyses and research.
Business-line Activities
Analysis, projection and research activities
objectives • Assess the economic situation and outlook, including uncertainty and
risks, to obtain information that contributes to monetary policy decision-making.
• Integrate analysis and research to inform monetary policy decisions and choose monetary policy framework.
• Enhance effectiveness of monetary policy decisions, by avoiding decision-making errors and transmitting the decisions efficiently to financial markets.
Core Activities• Analyse domestic and international economic and financial developments.
Conduct researches related to important monetary policy issues. • Analyse monetary conditions appropriateness in view of price stability
target and take corrective measures in case of deviation.• Communicate transparently with economic agents and financial markets
on current and future monetary policy stance.
new Initiatives• Expand the range of information used in decision-making.• Enhance analytic capabilities to improve the economic analysis in line with
the economy and financial market developments. • Enhance efficiency of monetary policy transmission mechanism and in
particular, develop the interbank market.
Communication Activities
objective• Support the conduct of monetary policy through effective communication.
Core Activities • Communicate the reasons for the Bank’s monetary policy decisions in a
clear, open, and timely way.
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• Pursue an ongoing dialogue with the public to enhance knowledge of monetary policy; build public awareness of the importance of maintaining price stability and foster an ever-larger social support for Bank of Albania’s goal of inflation.
• Communicate with other stakeholders to ensure effective implementation of monetary policy decisions.
• Enhance transparency.
new Initiatives• Use a larger spectre of communication tools.• Foster Bank of Albania’s contribution to enhance the economic and
financial knowledge of the public.
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Strategy to achieve desired outcome
Medium-term objective The medium-term objective of the Bank of Albania, in its role as a statistical
agency is the qualitative and quantitative improvement of statistics it produces, in view of informing and supporting the decision-making of all interested economic agents. Enhancing transparency in communication and data dissemination and respective methodologies is another objective the Bank of Albania intends to accomplish in the future.
StrategyThe strategy to achieve the desired outcome is based on expanding human
and technological capacities, and enhancing efficiency of using the resources. Future efforts will aim at a better and complete implementation of core principles specified in the European Statistics Code of Practice.
Priorities • Improve the legal base in accordance with the Bank of Albania’s role
as a statistical agency. • Expand the coverage base of reporting units in accordance with
international practices.• Improve the reporting process in terms of content, computation and
strengthening of information quality control criteria. • Improve the methodological framework, signifying adopt new standards
and implement rigorously the existing data processing and reporting standards.
• Improve the published statistical information in terms of detailing the
4.2. STATISTICS
The main purpose of statistics produced by the Bank of Albania is to uphold Bank of Albania’s monetary policy and other tasks of this institution. The statistics categorised in monetary and financial statistics, and foreign sector statistics are made available to all Albanian and foreign users through Bank of Albania’s publications according to adopted formats and schedule. An ongoing challenge of the Bank of Albania in its role as a statistical agency lies in improving standards and statistics production methodology, aiming at approximating them with international standards.
existing indicators, adding new indicators and improving publication terms.
Business-line Activities Core activities in terms of qualitative and quantitative improvement of Bank of
Albania’s statistics will be:
• Invest in upgrading technology to improve information gathering, control and processing.
• Educate and train human resources constantly at work and in specific qualification programs, to acquire updated methodologies and best practices in statistics production, dissemination and usage worldwide.
• Carry out different activities to exchange experience and share values with statistics-producing institutions and users.
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desired outcomeThe Bank of Albania aims to use scientific activity in economics, as a means
of:
• building and maintaining econometric models for economic forecasts and for comparing different policy effects;
• supporting current decision-making process;• gradually creating grounds for a more certain forecasting of macroeconomic,
financial and other situations; • raising the prestige of the Bank of Albania to the public opinion and
counterparties, as an active institution in developing scientific research in economics;
• enhancing the Bank of Albania’s credibility as an institution guaranteeing the country’s macroeconomic balances.
Strategies to achieve desired outcome
desired outcome• Conduct scientific research on areas of interest for the Bank of Albania,
contributing to Albanian economy recognition in the region and beyond and to economic, social and political processes that affect it.
• Integrate economic research and analyses to advise and assist Bank of Albania’s decision-making on its core functions - monetary policy, financial stability and financial market regulation.
PrioritiesThe above goals will be accomplished through:
• adjustment of Bank of Albania’s research structure to enable the effective achievement of objectives;
4.3. ReSeARCH
research at the Bank of Albania underwent constant growth in both components, qualitative and quantitative ones. recently its direct contribution to enhancing decision-making process and better research on causality among various indicators, including monetary policy decision-making effects on the economy has increased.
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• empirical study of economy, according to following priorities:
• Conduct qualitative research in applied economics, to assess the hypotheses raised from economic analyses in:
- monetary policy and transmission mechanism (focusing on macroeconomic modelling, explanation of monetary phenomena and monetary policy strategy);
- external sector (focusing on exchange rate);- fiscal sector (focusing on fiscal sector’s modelling);- financial market evolution and stability (focusing on financial stability
modelling and markets organisation);- economic growth and business cycle (focusing on business cycle
assessment, productivity and labour market).
• Publish these researches in well-known scientific magazines. • Raise scientific collaboration with counterparties and academic institutions
at home and abroad; • Conduct researches and achieve professional skills in applied economics
research methodology, as follows:
• State Space models; • Dynamic Stochastic General Equilibrium Models;• Bayesian Vector Autoregressive Models.
Business-line Activities
objectives • Organise joint activities and works with qualified institutions in economic
research areas. • Carry out “Friday seminar”. • Organise “Researches on South-east Europe” activity.• Share knowledge gathered from research and scientific process in the form
of training.
new Initiatives• Establish the Institute of Economic and Banking Research
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desired outcomeDuring 2009-2011 the core objective of the Financial Stability Department is
improving the procedures for assessing risks related to financial system stability and setting-up a complete framework of internal operations of the Bank of Albania for managing situations posing systemic risk to the banking sector and the financial system.
STRATeGy By dePARTMenTS
Financial Stability departmentTo accomplish the objective, the Financial Stability Department aims to improve
the quality and quantity of its products for internal use and for the public at large,
4.4. FInAnCIAl STABIlITy
Central banks play an important role in achieving and maintaining financial system stability, but this role is not exclusive. The importance of the objective and the variety and complexity of interwoven issues require harmonization of efforts with other institutions, highlighting supervisory authorities of banking and non-banking financial institutions and deposit insurance agencies. other institutions incorporated in this framework are those that oversee competition performance in the financial market and those that promote adoption of various standards and check their implementation. in the context of financial markets openness and integration, authorities of different countries have found it reasonable to extend this cooperation internationally.
Besides the primary target to achieve and maintain price stability, the Law on the Bank of Albania, No. ��69, dated ��.��.�99� (amended), sanctions the responsibility of the Bank of Albania to license and supervise the banking activity, promoting the payment system functioning and oversight, providing the market with liquidity in the role of the lender of last resort and informing the public on nature and type of threats to stability of the financial system.
in this framework, Bank of Albania’s role in terms of promoting and maintaining financial system stability aims at setting up sound financial institutions that operate in the competitive financial market and with a developed and safe infrastructure with mechanisms that promote effective management of financial resources and risks on the side of investors.
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by developing staff expertise and technical capacities, as well as by cooperating with other institutions.
Concerning development of its products, the Financial Stability Department aims to:
• build the financial stability risks map and create a clear procedure for reviewing it along the time – within the first six months of 2010;
• set-up and conduct surveys to recognize debt exposure of the real sector of the economy (enterprises and households) – till end of 2010;
• strengthen the Department’s analysis on payment system and stress-tests to assess financial system stability – until end 2010;
• enhance analysis on non-bank financial sector - until end 2011;• pass on to preparation and publication of Financial Stability Report twice a
year (In April and October/November). Its summary will display Financial Stability Statement – starting with the financial developments of 2010;
• design a complete framework of internal procedures and actions for issues related to situations posing systemic risk to financial system and the banking sector - until end 2011.
To accomplish the above goal, the Financial Stability Department will pay attention to adjustment of the Department’s structure, development of staff expertise and its support with the necessary technological infrastructure. In this regard the adjustment of the Department’s structure, the staff expertise and technical infrastructure will be assessed within 2010 to present relevant proposals about:
• making regulatory changes to enable: • staff expertise;• increase of staff number, if necessary;
• applying for trainings in certain areas;• developing at the Bank of Albania or purchase various software that enable
data obtaining and information processing, in view of preparing different assessment and forecasting models;
• increasing financial evaluation and other benefits, pursuant to Bank’s respective regulations.
In the framework of cooperating with other institutions, the Financial Stability Department aims to:
• find and exchange effective information and data with the Financial Supervision Authority, the Institute of Statistics, representatives of banking industry and other economic entities, particularly in terms of assessing the performance of non-bank financial sector, and distinguishing and
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evaluating the size of debt exposure of enterprises and families; • if necessary, participate in implementation of joint projects with above-
mentioned institutions, to improve the procedures for collecting, processing and interpreting information needed to achieve the Department’s goals;
• establish a more effective cooperation with central banks of developed countries and with specialised international institutions. Cooperation with these institutions will be oriented particularly to the following directions: • Improvement of stress-test and scenarios analyses to assess financial
system stability;• Enhancement of capacities and methodologies to assess the stability of
financial system infrastructure and mainly of the payment systems;• Improvement and completion of operational framework of the Bank of
Albania, management of situations posing systemic risk to the financial system stability.
Supervision departmentDuring 2009-2011 the Supervision Department aims to orient its supervisory
activity towards risk-based supervision standards and respective European directives, so that the banking activity in our country develops safely and the banking sector carries out soundly the financial intermediation process, with benefits to the banking industry and the public availing from its services.
outcome Goals by FunctionsLicensing and regulatory function aims to:
• review the licensing policy on the basis of current and expected conditions of the financial and banking system;
• revaluate the licensing procedures to speed up and simplify them, particularly the ones related to non-bank financial activity;
• make necessary regulatory changes, pursuant to the Law “On Banks in the Republic of Albania” (hereinafter referred to as the banking law) and in view of approximation with the European Union Directives and international standards for an effective supervision. Regulatory changes will be made keeping in focus the analysis of environment, risks and measures to consequently continue the prudential stance. Below are provided several pillars from the viewpoint of supervision, preserving the flexibility to address potential risks and developments in real time:
• Review the regulatory framework over the medium term - pursuant to the banking law - aiming, in particular, to complete the framework of regulating the conservatorship and liquidation process of banks;
• Review the regulations, in which IFRSs will provide effects mainly on prudential indicators (provisioning, tradable securities, etc.), including
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qualitative conceptions;• Implement the New Capital Accord or Basle II (pillar I), relating to credit
risk re-conception and assessment of its effects on bank capital adequacy, including also the presentation of an additional capital requirement to monitor operational risk – drafting initially a strategy for implementing Basle II and legal spaces and capacities for implementation;
• Implement appropriate infrastructure to ensure a sound financial and banking activity, contributing to macroeconomic developments and financial stability, and to exercise a more effective supervision in view of maintaining the financial stability.
Off-site analysis function aims to:
• revaluate stress-test methodology;• expand information and analyses; • change the framework of requirements that define the entities’ reporting;• create an on-line reporting system, which will improve significantly the
reporting quantity, quality and time, and will create necessary flexibility to reflect changes that may arise in reporting in a short period of time.
Credit registry aims to:
• provide accurate data and evidence the usage of register by banks;• conduct analyses, for the effect of banking supervision, on the basis of real
time data of the register;• expand the register users with non-bank entities.
Supervisory function aims to:
• develop risk-based supervision process; In this framework, operational policy document of supervision will be reviewed;
• collaborate with other supervisory authorities within the country and internationally;
• re-assess the Manual on corrective measures;• specify crisis management procedures;• oversee constantly the process of banks’ transparency.
Payment system department During 2009-2011 the Payment System Department aims at strengthening
payment system oversight, carrying out necessary improvements in technological infrastructure and the spectre of using these systems in collaboration with other departments, as well as enhancing Bank of Albania’s contribution to promoting modern payment methods in our country.
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To achieve this mission, the Payment System Department aims at meeting the following objectives over the medium term:
• Improve the structure and role of the National Payment Committee through the following actions:
• Review the regulatory base of the functioning of the National Payment Committee in accordance with the best international standards;
• Expand the Committee’s composition to be more comprehensive, not only with participant banks, but also with other actors that affect national improvement of the payment services, such as card processing operators, telephone services operators, public administration participants, etc;
• Coordinate work with banks for IBAN implementation and Albanian IBAN recognition from respective international institutions.
• Strengthen payment system oversight function, by means of the following actions:
• Complete legal/regulatory base (draft a law on payment and settlement systems in Albania, a regulation on system oversight, a regulation on payment instruments, etc);
• Create proper human resources capacities for carrying out this function, to license and supervise entities providing payment services;
• Meet Bank’s obligations pursuant to core principles on systemically important payment systems.
• Enhance Bank of Albania’s role as a catalyst for the payment system, by means of the following actions:
• Encourage interbank market in order to approximate and integrate new payment services and improve the existing infrastructure;
• Create proper infrastructure and adapt payment instruments from the regulatory and technical viewpoint, adhering to rules and principles of payment instrument functions in the framework of SEPA project.
• Improve infrastructure of securities safety, recording and settlement through the following actions:
• Coordinate with securities register operation to implement one of core principles of the payment system - Delivery Versus Payment (cooperating with the Monetary Operations Department);
• Collaborate with institutions responsible for securities market (Financial Supervision Authority, Ministry of Finance, Securities Commission)
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related to oversight of entities providing services of securities transactions settlement.
• Enhance transparency to the public by carrying out the following actions:
• Publish reports on assessing the systems in accordance with international payment system principles;
• Process and publish periodically data on payment instrument indicators;
• Publish a book on the payment system according to international ‘Red Book’ standards.
To achieve its mission, the Payment System Department will pursue the best principles of cooperation with other departments of the Bank, as well as with representatives of other public and banking industry institutions, which play a role in the framework of construction, implementation and strengthening of the regulatory and technical requirements for upgrading payment and settlement systems in our country.
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desired outcomeBank notes and coins in circulation should meet updated international standards.
At start 2011, no banknotes of different designs for same denomination (1000 lek and 500 lek banknotes issued prior to 1996) should circulate.
Strategy to achieve desired outcomeReduce worn notes in circulation, by putting a clearly defined threshold for
classifying as appropriate for recirculation banknotes processed in the sorting systems currently used by the Bank of Albania.
Priorities• Replace notes from older series (issued prior to 1996) with new notes of
later issues.
Performance measures
Research and development
objective• Develop a program to ensure accurate information on the quality of notes
in circulation and enable replacement of those issued prior to 1996.
4.5. CuRRenCy
ReSPonSIBIlITyThe Bank of Albania is the sole issuer of Albanian bank notes and coins. it is responsible for their design, security features, production and distribution. it is also responsible for the replacement of those that are old or worn. The Bank of Albania is also engaged in counterfeit deterrence through bank-note related education, communication and compliance.
TRendS And CHAllenGeSThe demand for bank notes and coins is expected to continue to grow, even though alternatives to cash are becoming more popular. The quality of notes in circulation does not meet the required standards. There still continue to circulate banknotes of the same denomination but of different designs and dimensions. Such a thing causes confusion to the public and adds the work at the processing processes by commercial banks and respective units of the Bank of Albania. Public awareness of security elements of Albanian banknotes is still low.
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new Initiatives• Issue Department structure will incorporate a specific unit to deal with
Albanian bank-note printing and re-printing, and analyse counterfeit notes (National Analysis Centre).
• Conduct research to better understand bank note usage, counterfeiting and alternative payment methods and new technologies.
• Build an automated reporting system, taking as a reference the analogous system of the European Central Bank.
Communication
objective• Instil public confidence in Albanian banknotes through specific programs
for introduction of security features.
new Initiatives• Publicise bank note legal tender status (notes in circulation and notes
enacted to be withdrawn from circulation).
legitimacy
objective• Complete the legal basis that regulates the whole activity of cash in the Republic
of Albania, converging towards European Central Bank’s legislation.
new Initiatives• Adjust and update the legal framework related to recycling of Albanian
banknotes and their classification.
operations and distribution
objective• Improve bank note processing efficiency.
Core activity• Manage bank note and coin inventories and distribution. • Analyse bank note and coin circulation and strategies related to withdrawal
of older-series of notes and coins.
�9
new initiatives• Replace current computer software with a new updated one, which will
manage bank notes and coins in real time in the whole system of the Bank of Albania.
• Upgrade note processing technology in cooperation with the establishment of a new cash centre, applying an automotive sorting, packing and shredding system.
Risk management• Work closely with police and other partners in counterfeiting deterrence.• Monitor counterfeiting threats. • Monitor the use of alternative means of payment.
4�
Core activities Governance objective at the Bank of Albania is achieved through the following
activities:
Provide expert advice and services to staff, administrators and the Supervisory Council of the Bank of Albania to enhance risk management, internal controls, and the corporate governance framework.
Bank of Albania’s decision-making bodies, such as the Supervisory Council or administrators, having the authority to approve all regulations issued by the Bank of Albania, pursuant to the organic law of the Bank of Albania or the Law on Banks in the Republic of Albania, determine basic regulatory standards based on the legal advice provided by the Legal Department of the Bank of Albania.
Applied Methods • Verify legitimacy and prevent violations in Bank’s activity.• Ensure and enhance legal quality of juridical acts.• Safeguard the juridical status of the Bank of Albania.
Impacting Factors• Preventing deficiencies in the existing legal framework and projecting
establishment of new elements, in accordance with the financial system developments in general and the banking one in particular.
• Creating possibilities for accurate and complete implementation of this legal framework in the entire activity of the Bank of Albania.
Monitoring external trend changes and development of legislative policies enabling best practices to Bank’s governance.
Adapting to latest developments of updated legislative policies, to European Union juridical acts and best international standards and practices of the area, is the proper way to enhance Bank governance.
4.6. GoveRnAnCe And leGAl SeRvISe
oBjeCTIveWe aim to provide guidance to policies, programs, and services that enable good governance and effective management of resources across Bank functions.
4�
Applied Methods • Approximate Bank’s laws and by-laws with the European Union directives
and international standards according to relevant areas, in the framework of approximating our legislation with that of the European Union and the European Central Bank.
• Strengthen Bank’s juridical initiative in terms of negotiating and drafting the necessary legal and regulatory framework for the banking and financial system, giving priority to the cooperation and interaction with other domestic and foreign banks and units.
Impacting Factors • Entire completion and improvement of Bank of Albania’s legal framework,
based on updated international standards, having European Central Bank standards as a goal.
• Sensitiveness to changes that juridical developments undergo and best practices in this area.
Enhancement of efficiency of juridical services and programs that support Bank’s goals.
The legal service development plan of the Bank of Albania aims to raise the authority and position accurately the Bank’s legal unit, in accordance with updated developments in the banking and financial systems. Efficiency enhancement of the Bank’s legal services is a necessary condition for development and adjustment to best standards.
Applied Methods• Clarification and accuracy of concrete targets and goals of the juridical
service within the legal framework on which this service is based. • Transparency enhancement in carrying out the legal services.
Impacting Factors• Legal services quality by choosing appropriate way and tools to achieve
the goal;• Performance enhancement.
new initiativesSetting medium-term goals and objectives of the legal framework of the Bank
of Albania is necessarily related to coherent developments of the overall activity of the Bank of Albania at present and in the future.
4�
Efforts for completing the whole regulatory framework will continue intensively, opening the way to other technical and institutional changes in the Albanian banking system.
Strengthening institutional independence and credibility of the Bank of Albania is an important initiative to enhance its governance as a central institution, responsible for its mission assigned by law.
Applied Methods
• Strengthening legal and regulatory baseStrengthening legal and regulatory base is one of the most important strategic
objectives of the Bank’s legal service, to guarantee successful achievement of the Bank’s goals.
The Law “On the Bank of Albania” should be changed in the strategic medium-term framework and in accordance with the National Plan on the Approximation of Legislation with that of the European Union and the implementation of the Stabilization and Association Agreement. The need to change the Law on the Bank of Albania arises from the inevitable requirement for approximating the provisions of this Law with the Acquis Communautaire and the European Union legislation.
The Bank’s Statute is an important act, which specifies corporate administration policies defined in the organic law of the Bank of Albania. To enhance the Bank of Albania’s governance, the need for reviewing the Statute provisions arises, aiming at improving the procedures of operational and administrative actions.
• enhance risk managementEnhancing risk management in general and legal risk in particular is one of
the key factors to achieve medium-term objectives of the Bank of Albania’s legal framework. Operational-risk management policies of the Bank of Albania will be closely monitored and in consistency with best standards and practices. Legal service at the Bank of Albania will ensure that this institution always operates on a sound legal base and the legal risk is adequately identified and monitored.
Impacting factors• Legal risk identification and analysis;• Improvement and development of the Bank’s regulatory framework on risk
management;• Proposal of risk management measures and terms in accordance to the
Bank’s developments
44
45
46
Core activitiesThe above objectives will be accomplished by: • carrying out Bank training, in cooperation with various domestic and foreign
institutions, including academic ones, based on the needs identified in advance through a performance-based appraisal system, and adapting to new upward requirements of the institution;
• identifying “potential” employees in terms of career development and qualification and academic growth;
• preparing promotion policies to motivate staff to enhance research at the Bank.
new initiativesAttainment of objectives for strengthening human resources requires
development and reviewing of composite instruments. To this end, the following actions should be made:
• Review performance appraisal system towards responsibility individualization for every member to accomplish tasks and meet Bank of Albania’s objectives
• Develop new approaches and indicators to monitoring performance in terms of accomplishment of objectives specified in this strategy.
Applied methods • Strengthening the regulatory base;• Test and review constantly the methods and instruments.
4.7. HuMAn ReSouRCeS
oBjeCTIveit is aimed at strengthening the administrative capacities of human resources to support achievement of the Bank’s strategic objectives. in this area, the Bank of Albania’s objective is:
• raise staff training and qualification level in all fields of the Bank’s operation;
• provide opportunities to further staff qualification in terms of academic level (scientific degrees), in accordance with their functions, tasks and qualification;
• orient the Bank of Albania towards an institution that has not only an administrative profile but also a scientific one.
4�
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Mon
etar
y po
licy
Infla
tion
targ
et 3
%, +
/- 1
Infla
tion,
infla
tion
fore
cast
ing,
real
and
m
onet
ary
indi
cato
rs im
pact
ing
on it
Impr
ove
perio
dic
anal
yses
in v
iew
of m
onet
ary
polic
y de
cisi
ons
2009
-201
1M
PD, R
D,
MO
D
Revi
ew a
nd im
prov
e m
onet
ary
polic
y fra
mew
ork
MP
obje
ctiv
es, o
pera
tiona
l ins
trum
ents
; de
cisi
on-m
akin
g pr
oces
s
Revi
ew a
nd a
dapt
the
MP’
s fin
al o
bjec
tive
to
mac
roec
onom
ic s
ituat
ion
of th
e co
untry
Im
prov
e th
e de
cisi
on-m
akin
g pr
oces
s 20
09-2
011
MPD
, RD
, M
OD
Dev
elop
and
enh
ance
fin
anci
al m
arke
t effi
cien
cyEf
ficie
ncy
and
com
petit
ion
in th
e sy
stem
Im
prov
e re
gula
tions
on
MP
inst
rum
ents
and
on
supe
rvis
ion
2009
-201
1M
PD, R
D,
MO
D, S
DIm
prov
e an
d de
velo
p fo
reca
stin
g m
odel
s M
odel
sIm
prov
e th
e st
atis
tical
par
amet
ers
of m
odel
s an
d in
crea
se
thei
r for
ecas
ting
pow
er
2009
-201
1M
PD, R
D,
MO
D, S
TD
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Issu
e D
epar
tmen
tSe
t up
a ne
w re
porti
ng s
yste
m o
n ca
sh, i
n ac
cord
ance
with
the
ECB
stan
dard
sn/
aEs
tabl
ish
cont
acts
and
exc
hang
e ex
perie
nce
with
th
e EC
BQ
4, 2
011
Issu
e D
epar
tmen
tIT
Dep
artm
ent
Adap
t the
lega
l bas
e, to
regu
late
cas
h ci
rcul
atio
n in
com
plia
nce
with
EC
B st
anda
rds
n/a
Esta
blis
h co
ntac
ts a
nd e
xcha
nge
expe
rienc
e w
ith
the
ECB
Q 4
, 201
1Is
sue
Dep
artm
ent
Lega
l Dep
artm
ent
Repl
ace
bank
note
s is
sued
prio
r to
1996
n/a
Re-p
rint t
he e
xist
ing
serie
s(a
lread
y at
tain
ed)
Q 4
, 201
0Is
sue
Dep
artm
ent
4�
FUN
CTI
ON
O
BJEC
TIVE
IND
ICAT
OR
MEA
SURE
SCH
EDU
LERE
SPO
NSI
BLE
UN
IT
Paym
ent
syst
ems
Stre
ngth
en p
aym
ent s
yste
m
over
sigh
t Fu
rther
impr
ovem
ent o
f stru
ctur
e an
d ro
le
of th
e N
atio
nal P
aym
ent S
yste
m C
omm
ittee
Revi
ew th
e re
gula
tory
bas
e on
sco
pe o
f the
N
atio
nal P
aym
ent S
yste
m C
omm
ittee
, in
com
plia
nce
with
bes
t int
erna
tiona
l sta
ndar
ds
Q 2
, 201
0PS
DLD
Car
ry o
ut n
eces
sary
im
prov
emen
ts in
tech
nolo
gica
l in
frast
ruct
ure
and
the
paym
ent
syst
em u
sage
spe
ctre
Expa
nd th
e C
omm
ittee
’s c
ompo
sitio
n to
be
mor
e co
mpr
ehen
sive
, not
onl
y w
ith b
anks
as
parti
cipa
nts,
but
als
o w
ith o
ther
act
ors
that
wou
ld
impa
ct o
n im
prov
emen
t of p
aym
ent s
ervi
ces
natio
nally
Q 4
, 201
0PS
DIT
D
Enha
nce
the
Bank
’s c
ontri
butio
n to
pro
mot
ing
mod
ern
paym
ent
met
hods
in
Alb
ania
Coo
rdin
ate
wor
k w
ith b
anks
for t
he
impl
emen
tatio
n of
Alb
ania
n IB
AN a
nd
reco
gniti
on o
f Alb
ania
n IB
AN fr
om in
tern
atio
nal
resp
ectiv
e in
stitu
tions
Q 4
, 200
9PS
DIT
DM
OD
Stre
ngth
enin
g of
the
paym
ent s
yste
m
over
sigh
t fun
ctio
n C
ompl
ete
lega
l/re
gula
tory
bas
eQ
4, 2
011
PSD
LD ITD
MO
D
Cre
ate
prop
er h
uman
cap
aciti
es fo
r car
ryin
g ou
t th
e fu
nctio
n, a
imin
g at
lice
nsin
g an
d su
perv
isin
g th
e en
titie
s th
at s
uppl
y pa
ymen
t ser
vice
s Q
4, 2
011
PSD
Mee
t the
Ban
k of
Alb
ania
’s o
blig
atio
ns, i
n co
mpl
ianc
e w
ith c
ore
prin
cipl
es o
f sys
tem
ical
ly
impo
rtant
pay
men
t sys
tem
sQ
4, 2
010
PSD
Stre
ngth
enin
g of
the
Bank
of A
lban
ia’s
role
as
a c
atal
yst f
or p
aym
ent s
yste
m
Prom
ote
inte
rban
k m
arke
t to
appr
oach
and
in
tegr
ate
new
pay
men
t ser
vice
s, a
s w
ell a
s im
prov
e th
e ex
istin
g st
ruct
ures
Onw
ard
PSD
Cre
ate
nece
ssar
y in
frast
ruct
ure
and
adju
st
paym
ent i
nstru
men
ts fr
om th
e re
gula
tory
and
te
chni
cal v
iew
poin
t, in
com
plia
nce
with
rule
s an
d pr
inci
ples
of S
EPA
paym
ent i
nstru
men
ts
Onw
ard
PSD
49
Impr
ovem
ent o
f sec
uriti
es m
aint
enan
ce,
regi
stra
tion
and
settl
emen
t inf
rast
ruct
ure
Coo
rdin
ate
betw
een
MO
D a
nd P
SD fo
r car
ryin
g ou
t the
func
tion
of s
ecur
ities
regi
stra
tion
to m
eet
the
DVP
requ
irem
ents
Onw
ard
PSD
MO
PIT
D
Stre
ngth
en th
e co
llabo
ratio
n w
ith s
ecur
ities
m
arke
t ins
titut
ions
, for
ove
rsig
ht o
f sys
tem
s an
d en
titie
s th
at p
rovi
de s
ecur
ities
mai
nten
ance
and
se
ttlem
ent t
rans
actio
n
Onw
ard
PSD
MO
D
Enha
ncem
ent o
f tra
nspa
renc
y to
the
publ
icPu
blis
h sy
stem
ass
essm
ent r
epor
ts, i
n co
mpl
ianc
e w
ith in
tern
atio
nal p
aym
ent s
yste
m p
rinci
ples
Q
4, 2
010
PSD
Perio
dica
lly p
roce
ss a
nd p
ublis
h da
ta o
n pa
ymen
t in
stru
men
t ind
icat
ors
Onw
ard
PSD
Publ
ish
a bo
ok o
n th
e pa
ymen
t sys
tem
in
acco
rdan
ce w
ith in
tern
atio
nal s
tand
ards
Q 4
, 201
1
PSD
in
colla
bora
tion
with
the
Bank
’s o
ther
de
partm
ents
50
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Fina
ncia
l st
abili
ty
Impr
ove
risk
asse
ssm
ent
proc
edur
es o
n fin
anci
al
syst
em s
tabi
lity
Enha
ncem
ent o
f its
pro
duct
s fo
r in
tern
al u
se a
nd p
ublic
atio
nSe
t up
a fin
anci
al s
tabi
lity
risk
map
and
a c
lear
pro
cedu
re fo
r re
view
ing
it al
ong
the
time
Q 2
, 201
0FS
D
Set u
p an
d co
nduc
t sur
veys
to re
cogn
ize
debt
exp
osur
e of
the
real
se
ctor
of t
he e
cono
my
(of e
nter
pris
es a
nd h
ouse
hold
s)
Q 4
, 201
0FS
D
Stre
ngth
en th
e FS
D a
naly
ses
on is
sues
rela
ted
to p
aym
ent s
yste
ms
and
stre
ss-te
sts,
to a
sses
s th
e fin
anci
al s
yste
m s
tabi
lity
FSD
Enha
nce
anal
ysis
of t
he s
hare
of n
on-b
ank
finan
cial
sec
tor
Q 4
, 201
0FS
DPr
epar
e an
d pu
blis
h th
e Fi
nanc
ial S
tabi
lity
Repo
rt tw
ice
a ye
ar (o
n Ap
ril a
nd O
ctob
er/N
ovem
ber),
who
se s
umm
ary
will
repr
esen
t the
Fi
nanc
ial S
tabi
lity
Repo
rt Q
2, 2
011
FSD
Esta
blis
h a
com
plet
e fra
mew
ork
of p
roce
dure
s an
d in
tern
al a
ctio
ns
rela
ted
to s
ituat
ions
pos
ing
syst
emic
risk
to fi
nanc
ial a
nd b
anki
ng
syst
ems
Q 4
, 201
1FS
D
Dev
elop
men
t of s
taff
expe
rtise
of
the
Fina
ncia
l Sta
bilit
y D
epar
tmen
t As
sess
Dep
artm
ent’s
stru
ctur
e co
mpo
sitio
n, a
nd p
rofe
ssio
nal a
nd
tech
nica
l cap
aciti
es
2010
and
on
war
dFS
D
Mak
e re
gula
tory
cha
nges
to e
nabl
e st
aff e
xper
tise
and
incr
ease
st
aff n
umbe
r, if
nece
ssar
y Q
4, 2
010
FSD
Appl
y fo
r tra
inin
g co
urse
s in
cer
tain
are
as
Q 4
, 201
1FS
DD
evel
op a
t the
Ban
k of
Alb
ania
or p
urch
ase
vario
us s
oftw
are
that
en
able
obt
aini
ng o
f dat
a an
d pr
oces
sing
of i
nfor
mat
ion
in v
iew
of
prep
arin
g va
rious
ass
essm
ent a
nd fo
reca
stin
g m
odel
s O
nwar
d FS
DIT
D
Enha
nce
finan
cial
eva
luat
ion
and
othe
r ben
efits
, in
acco
rdan
ce
with
rele
vant
regu
lato
ry fr
amew
ork
of th
e Ba
nk o
f Alb
ania
Q
4, 2
010
FSD
Stre
ngth
enin
g of
coo
pera
tion
with
ne
w in
stitu
tions
Exch
ange
info
rmat
ion
and
data
effi
cien
tly w
ith th
e Fi
nanc
ial
Supe
rvis
ion
Auth
ority
, with
the
Inst
itute
of S
tatis
tics,
with
re
pres
enta
tives
of t
he b
anki
ng in
dust
ry a
nd o
ther
eco
nom
ic e
ntiti
es,
parti
cula
rly in
term
s of
ass
essi
ng th
e no
n-ba
nk fi
nanc
ial s
ecto
r’s
perfo
rman
ce a
nd re
cogn
izin
g th
e co
rpor
ate
and
hous
ehol
d de
bt
expo
sure
siz
e.
Onw
ard
FSD
Parti
cipa
te, i
f nec
essa
ry, i
n th
e im
plem
enta
tion
of jo
int p
roje
cts
with
th
e ab
ove
inst
itutio
ns, t
o im
prov
e th
e pr
oced
ures
for c
olle
ctin
g,
proc
essi
ng a
nd in
terp
retin
g in
form
atio
n re
gard
ed a
s ne
cess
ary
for
atta
inin
g th
e FS
D’s
goa
ls
Onw
ard
FSD
Coo
pera
te e
ffect
ivel
y w
ith c
ount
erpa
rties
in o
ther
cen
tral b
anks
of
the
deve
lope
d co
untri
es a
nd w
ith s
peci
alis
ed in
tern
atio
nal
inst
itutio
ns
Onw
ard
FSD
5�
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Supe
rvis
ion
Orie
nt th
e su
perv
isor
y ac
tivity
to
war
ds ri
sk-
base
d su
perv
isio
n st
anda
rds
and
Euro
pean
di
rect
ives
Risk
-bas
ed
supe
rvis
ion
Esta
blis
h an
d de
velo
p pr
oper
risk
-bas
ed s
uper
visi
on m
etho
dolo
gies
. In
this
fram
ewor
k,
the
follo
win
g ac
tions
will
be
carr
ied
out:
• D
raft
man
uals
and
new
pro
cedu
res
for e
xerc
isin
g ris
k-ba
sed
supe
rvis
ion;
• Re
view
man
uals
and
pro
cedu
res
at le
ast o
nce
a ye
ar;
• Fu
rther
dev
elop
the
CAM
ELS
mat
rix;
• En
hanc
e th
e de
lega
ting
leve
l of t
asks
and
resp
onsi
bilit
ies
to p
ortfo
lio m
anag
emen
t (in
spec
tors
resp
onsi
ble
for b
anks
’ por
tfolio
) to
defin
e ris
k pr
ofile
of b
anks
in th
eir
juris
dict
ion;
• St
reng
then
the
exam
inat
ion
proc
ess,
with
spe
cial
focu
s on
: -
prep
arat
ory
stag
e of
exa
min
atio
n,-
rais
ing
the
frequ
ency
of e
xam
inat
ions
on
syst
emic
ban
ks,
- ar
eas
posi
ng h
ighe
r ris
k,
- an
alys
ing
scen
ario
s an
d us
ing
stre
ss-te
sts
to d
eter
min
e ca
pita
l req
uire
men
ts,
- re
conf
igur
atio
n of
exa
min
atio
n re
ports
, to
high
light
mai
n co
nclu
sion
s an
d do
cum
ent
the
findi
ngs,
thus
cre
atin
g th
e ba
se fo
r sub
mitt
ing
supe
rvis
ory
mea
sure
s.
- up
-bot
tom
exa
min
atio
ns o
f ris
k m
anag
emen
t pol
icie
s, th
roug
h bo
ttom
-up
appl
icat
ion
of ri
sk m
anag
emen
t fra
mew
ork;
• D
evel
op p
roba
bilit
y of
def
ault
and
loss
giv
en d
efau
lt, fo
r ave
rage
loan
in v
ario
us
portf
olio
seg
men
ts, b
ased
on
the
Cre
dit R
egis
try d
ata,
as
elem
ents
of i
nter
nal
cent
ralis
ed c
lass
ifica
tion
met
hods
;•
Dev
elop
the
revi
ew p
ract
ice
and
disc
uss
exam
inat
ion
resu
lts w
ith th
e w
hole
Su
perv
isio
n st
aff;
• St
reng
then
the
regu
lato
ry fr
amew
ork
to a
ddre
ss o
pera
tiona
l ris
k, a
s an
are
a th
at
requ
ires
grea
t atte
ntio
n.
Onw
ard
SD
Impl
emen
tatio
n of
Eu
rope
an U
nion
D
irect
ives
Mak
e ne
cess
ary
impr
ovem
ent o
f the
regu
lato
ry fr
amew
ork
purs
uant
to th
e re
quire
men
ts
of th
e La
w “
On
Bank
s in
the
Repu
blic
of A
lban
ia”
and
in v
iew
of a
ppro
xim
atio
n w
ith th
e Eu
rope
an U
nion
Dire
ctiv
es a
nd in
tern
atio
nal s
tand
ards
for e
ffect
ive
supe
rvis
ion
Onw
ard
SD
5�
Reor
gani
satio
n of
Sup
ervi
sion
D
epar
tmen
t
Reor
gani
se th
e de
partm
ent a
s so
on a
s po
ssib
le, s
ince
the
curr
ent s
truct
ure
does
not
pr
ovid
e ap
prop
riate
sup
port
to fu
rther
dev
elop
men
ts o
f sup
ervi
sion
. In
this
fram
ewor
k,
draf
ting
a re
orga
nisa
tion
mod
el a
ims
at:
• ov
erco
min
g di
fficu
lties
and
def
icie
ncie
s of
the
exis
ting
stru
ctur
e;•
impl
emen
tatio
n ef
ficie
ncy;
• du
e su
ppor
t to
impl
emen
t ris
k-ba
sed
supe
rvis
ion;
• co
ordi
natin
g at
a h
igh
leve
l the
inte
ract
ion
of b
anki
ng s
uper
visi
on fu
nctio
ns
Onw
ard
SD
Rela
tions
bet
wee
n Su
perv
isio
n D
epar
tmen
t, Fi
nanc
ial S
tabi
lity
and
Mon
etar
y Po
licy
The
stra
tegy
und
erlin
es th
e ne
ed fo
r stre
ngth
enin
g th
e co
oper
atio
n am
ong
depa
rtmen
ts.
In th
is fr
amew
ork,
Ban
king
Sup
ervi
sion
will
hel
p in
term
s of
: •
cred
it ex
pans
ion
or c
ontra
ctio
n;•
requ
ired
rese
rve
man
agem
ent b
y m
odify
ing
the
regu
lato
ry fr
amew
ork;
• pa
rtial
exa
min
atio
ns;
• sy
stem
ic li
quid
ity;
• em
erge
ncy
plan
s
Onw
ard
SD; M
PD; F
SD
Rela
tions
bet
wee
n th
e do
mes
tic
Supe
rvis
ion
Auth
ority
an
d th
e fo
reig
n on
e
Stre
ngth
en th
e co
oper
atio
n w
ith o
ther
sup
ervi
sory
aut
horit
ies
in th
e co
untry
and
abr
oad,
ai
min
g to
ove
rcom
e or
min
imis
e:•
diffe
renc
es in
term
s of
the
impo
rtanc
e th
e ba
nks’
sub
sidi
arie
s ha
ve in
the
bank
ing
syst
em;
• im
pact
of g
loba
l fin
anci
al c
risis
;•
certi
ficat
ion
of ra
ting
agen
cies
in d
iffer
ent j
uris
dict
ions
;•
dist
inct
ions
in s
uper
visi
on fr
amew
ork,
repo
rting
sta
ndar
ds, i
nfor
mat
ion
disc
losu
re
and
law
enf
orce
men
t;•
diffe
rent
leve
ls o
f app
licab
ility
of I
nter
natio
nal F
inan
cial
Rep
ortin
g St
anda
rds.
Onw
ard
SD
Rela
tions
with
Fi
nanc
ial S
uper
viso
ry
Auth
ority
Fost
er c
oope
ratio
n w
ith th
e FS
A in
term
s of
:•
crea
ting
a jo
int d
atab
ase
to b
e us
ed fo
r dai
ly e
xcha
nge
of in
form
atio
n;•
draf
ting
join
t pro
ject
s to
impl
emen
t Int
erna
tiona
l Fin
anci
al R
epor
ting
Stan
dard
s;•
sync
hron
isin
g op
erat
ions
to s
treng
then
the
finan
cial
dis
cipl
ine;
• co
ordi
natin
g op
erat
ions
to d
evel
op a
nd a
pply
em
erge
ncy
plan
s fo
r the
ban
king
sy
stem
and
for t
he w
hole
fina
ncia
l mar
ket;
• de
velo
ping
a jo
int s
chem
e to
pro
tect
cus
tom
ers
Onw
ard
SD
Self-
regu
latio
n of
the
bank
ing
sect
or a
nd
cust
omer
pro
tect
ion
Supe
rvis
ion
will
sup
port
self-
regu
latio
n of
the
bank
ing
sect
or to
con
tribu
te to
impr
ovin
g ris
k m
anag
emen
t and
fost
erin
g co
nfid
ence
in th
e ba
nkin
g se
ctor
, in
the
follo
win
g ar
eas:
•
Inte
rban
k m
oney
mar
ket,
• C
olla
tera
l eva
luat
ion
in th
e le
ndin
g pr
oces
s,•
Ethi
cs c
ode
deve
lopm
ent,
• D
evel
opm
ent o
f Alb
ania
n As
soci
atio
n of
Ban
ks a
s a
prof
essi
onal
org
anis
atio
n.
Onw
ard
SD
5�
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Stat
istic
s
Impr
ove
the
lega
l bas
e in
sup
port
of th
e Ba
nk o
f Alb
ania
’s ro
le a
s a
stat
istic
al
agen
cyAd
opt c
ore
prin
cipl
es o
f the
Eur
opea
n St
atis
tics
Cod
e of
Pra
ctic
e an
d ot
her
sim
ilar c
odes
.
The
Law
on
the
Bank
of A
lban
ia a
nd
the
by-la
ws
that
regu
late
col
lect
ion
of
info
rmat
ion,
repo
rting
of o
blig
atio
ns b
y th
e re
porti
ng e
ntiti
es, t
he B
ank’
s re
latio
ns
with
third
par
ties
and
dist
ribut
ion
and
publ
icat
ion
of s
tatis
tical
indi
cato
rs
Hav
e co
ntac
ts a
nd tr
aini
ng in
inte
rnat
iona
l in
stitu
tions
of t
he a
rea
(EC
B, E
URO
STAT
, O
ECD
, IM
F) a
nd c
olla
bora
te w
ith o
ther
st
atis
tical
age
ncie
s of
the
coun
try
2009
-201
1ST
D, L
D, S
D,
FSD
, MPD
, FR
EIC
D
Expa
nd a
nd im
prov
e st
atis
tical
dat
abas
e pr
oduc
ed b
y th
e Ba
nk o
f Alb
ania
, in
term
s of
the
num
ber o
f ind
icat
ors,
di
sagg
rega
ting
leve
l, de
lays
in p
ublic
atio
n an
d pe
riodi
city
The
data
base
of i
ndic
ator
s pr
oduc
ed b
y th
e Ba
nk o
f Alb
ania
:-B
anki
ng, m
onet
ary
and
finan
cial
in
dica
tors
;-E
xter
nal s
ecto
r ind
icat
ors:
bal
ance
of
pay
men
ts, i
nter
natio
nal i
nves
tmen
t po
sitio
n, e
xter
nal d
ebt
Impr
ove
the
lega
l bas
e on
the
repo
rting
sy
stem
Im
prov
e an
d up
grad
e th
e re
porti
ng s
yste
m
Qua
lify
hum
an c
apac
ities
in s
tatis
tics
com
pila
tion
Dra
w o
n ex
perie
nce
and
get a
cqua
inte
d w
ith th
e re
quire
men
ts o
f int
erna
tiona
l in
stitu
tions
(EC
B, E
URO
STAT
, OEC
D, I
MF)
on
sta
tistic
al re
porti
ng
2009
-201
1ST
D, I
TD,
FREI
CD
Impr
ove
and
appr
oxim
ate
resp
ectiv
e m
etho
dolo
gies
with
inte
rnat
iona
l st
anda
rds
and
norm
s.
Met
hodo
logi
es a
nd re
gula
tory
act
s on
st
atis
tics
Expa
nd a
nd q
ualif
y hu
man
and
te
chno
logi
cal c
apac
ities
H
ave
cont
acts
and
trai
ning
in in
tern
atio
nal
inst
itutio
ns o
f the
are
a (E
CB,
EU
ROST
AT,
OEC
D, I
MF)
and
oth
er c
entra
l ban
ks
2009
-201
1ST
D, L
D, I
TD
Enha
nce
trans
pare
ncy
in c
omm
unic
atio
n an
d di
strib
utio
n of
dat
a in
term
s of
de
taili
ng th
e ex
istin
g in
dica
tors
; add
ing
new
indi
cato
rs a
nd im
prov
ing
the
publ
icat
ion
term
s
All s
tatis
tical
pub
licat
ion
spac
es:
Web
site
Stat
istic
al R
epor
tO
ther
per
iodi
c st
atis
tical
bul
letin
sPe
riodi
c re
ports
of t
he B
ank
of A
lban
ia
Expa
nd a
nd q
ualif
y hu
man
and
te
chno
logi
cal c
apac
ities
C
ondu
ct in
trodu
ctor
y an
d tra
inin
g ac
tiviti
es
with
sta
tistic
s us
ers
2009
-201
1ST
D, I
TD,
FREI
CD
Impr
ove
the
repo
rting
sys
tem
thro
ugh
dire
ct q
ualit
ativ
e an
d qu
antit
ativ
e su
rvey
s fro
m c
ompa
nies
and
hou
seho
lds
Indi
cato
rs p
rodu
ced
by p
roce
ssin
g in
form
atio
n an
d da
ta fr
om s
urve
ys a
nd
acco
mpa
nyin
g pu
blic
atio
ns
Impr
ove
the
repo
rting
sys
tem
’s le
gal b
ase
and
auto
mat
ion
Impr
ove
publ
ic c
omm
unic
atio
n an
d ed
ucat
ion
on a
cer
tain
pro
duct
2009
- 2
011
STD
, ITD
, FR
EIC
D
54
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Inte
rnat
iona
l co
oper
atio
n an
d Eu
rope
an
inte
grat
ion
Ensu
re e
ffect
ive
impl
emen
tatio
n of
obl
igat
ions
ste
mm
ing
from
SA
A (e
cono
mic
crit
eria
; fre
edom
of
dec
isio
n-m
akin
g, fr
eedo
m to
pr
ovid
e se
rvic
es; l
iber
aliz
atio
n of
ca
pita
l flo
ws
and
appr
oxim
atio
n of
legi
slat
ion)
and
Eur
opea
n pa
rtner
ship
with
Alb
ania
Annu
al re
ports
and
opi
nion
s of
Eur
opea
n C
omm
issi
on
on th
e Ba
nk’s
pro
gres
s in
im
plem
entin
g th
e ob
ligat
ions
st
emm
ing
from
Eur
opea
n In
tegr
atio
n
Coo
rdin
ate
wor
k an
d m
onito
r im
plem
enta
tion
of th
e Ba
nk’s
com
mitm
ents
to E
urop
ean
inte
grat
ion
Onw
ard
FREI
CD
Stra
tegi
c co
ordi
natio
n of
the
Euro
pean
inte
grat
ion
proc
ess
at
the
Bank
Euro
pean
Com
mis
sion
’s
asse
ssm
ent o
n th
e Ba
nk’s
pr
ogre
ss, r
efle
cted
in a
nnua
l re
ports
and
opi
nion
s
Prep
are
stra
tegi
c do
cum
ents
, in
coop
erat
ion
with
oth
er
depa
rtmen
ts, o
n Eu
rope
an in
tegr
atio
n pr
oces
s.O
nwar
dFR
EIC
D
Euro
pean
Com
mis
sion
’s
opin
ion
abou
t Alb
ania
’s
appl
icat
ion
for E
U
mem
bers
hip:
pos
itive
as
sess
men
t abo
ut a
reas
for
whi
ch th
e Ba
nk o
f Alb
ania
is
resp
onsi
ble
Coo
rdin
ate
wor
k fo
r pre
parin
g an
swer
s to
the
ques
tionn
aire
of t
he E
urop
ean
Com
mis
sion
.
Dep
endi
ng o
n th
e pr
esen
tatio
n of
the
ques
tionn
aire
from
C
omm
issi
on’s
se
rvic
es
FREI
CD
All d
epar
tmen
ts
of th
e Ba
nk
Lega
l con
verg
ence
with
the
Trea
ty o
n Eu
rope
an U
nion
and
th
e St
atut
e of
Eur
opea
n Sy
stem
of
Cen
tral B
ank
Stre
ngth
enin
g Ba
nk’s
in
depe
nden
ce
Coo
rdin
ate
and
mon
itor t
he p
roce
ss o
f dra
fting
lega
l ac
ts in
com
plia
nce
with
the
acqu
is c
omm
unau
taire
an
d en
sure
com
plia
nce
with
pro
ject
s w
ith re
spec
t to
Euro
pean
Uni
on.
Onw
ard
FREI
CD
Appr
oxim
ate
the
dom
estic
lega
l fra
mew
ork
with
the
acqu
is
com
mun
auta
ire
Com
para
tive
anal
ysis
of t
he A
lban
ian
regu
lato
ry
and
inst
itutio
nal f
ram
ewor
k (in
ban
king
and
fina
ncia
l se
rvic
es, p
aym
ent a
nd c
apita
l mob
ility
, con
sum
er
prot
ectio
n an
d ce
ntra
l ban
k in
depe
nden
ce) i
n re
latio
n to
ac
quis
com
mun
auta
ire.
Q 4
, 201
1FR
EIC
D
Appr
oxim
atio
n m
etho
dolo
gyPr
epar
e th
e m
etho
dolo
gy fo
r app
roxi
mat
ing
dom
estic
ju
ridic
al a
cts
to th
e ac
quis
.Q
4, 2
009
FREI
CD
Bene
fit fr
om fi
nanc
ial a
ssis
tanc
e of
the
Euro
pean
Uni
on
Num
ber o
f acq
uis
acts
tra
nsla
ted
into
Alb
ania
nN
umbe
r of p
roje
cts
bene
fited
Tran
slat
e ac
quis
into
Alb
ania
n la
ngua
geG
uide
and
coo
rdin
ate
assi
stan
ce o
f the
Eur
opea
n C
omm
unity
. Coo
rdin
ator
for I
PA, T
AIEX
and
Tw
inni
ng
prog
ram
.
Onw
ard
Onw
ard
FREI
CD
FREI
CD
Car
ry o
ut a
twin
ning
pro
gram
with
one
or t
wo
cent
ral
bank
s th
at a
re m
embe
rs o
f the
ESC
B.
Info
rmat
ion
and
com
mun
icat
ion
Deg
ree
of p
ublic
kno
wle
dge
on th
e Ba
nk’s
role
in
Euro
pean
inte
grat
ion
proc
ess
Org
anis
e in
form
ativ
e ac
tiviti
es o
n al
l EU
-rel
ated
issu
es
that
affe
ct th
e Ba
nk’s
act
ivity
, to
ensu
re b
road
pub
lic
unde
rsta
ndin
g of
refo
rms
and
nece
ssar
y ch
ange
s in
the
Euro
pean
inte
grat
ion
proc
ess.
Onw
ard
FREI
CD
55
Stre
ngth
en th
e Ba
nk’s
in
stitu
tiona
l cap
aciti
esAn
nual
regu
lar t
rain
ing
Trai
n th
e Ba
nk’s
sta
ff in
Eur
opea
n in
tegr
atio
n is
sues
. O
nwar
dFR
EIC
DH
RDD
evel
opm
ent o
f tec
hnic
al
assi
stan
ce fo
rms
Car
ry o
ut s
emin
ars,
stu
dy v
isits
and
job
prac
tices
at
othe
r cen
tral b
anks
.O
nwar
d FR
EIC
D
Fost
er c
oope
ratio
n w
ith c
entra
l ba
nks
of S
outh
-Eas
t Eur
ope
and
beyo
nd
Parti
cipa
te in
the
mee
tings
of t
he C
entra
l Ban
k G
over
nors
’ Clu
b of
the
Cen
tral A
sia,
Bla
ck S
ea R
egio
n an
d Ba
lkan
cou
ntrie
s, th
e C
lub
of F
renc
h Sp
eaki
ng
Cen
tral B
anke
rs a
nd o
ther
regi
onal
mee
tings
.
Onw
ard
FREI
CD
Fost
er c
oope
ratio
n w
ith th
e So
uth-
East
Eur
ope
in b
anki
ng
supe
rvis
ion
and
finan
cial
sta
bilit
y of
the
regi
on
Bank
of A
lban
ia’s
par
ticip
atio
n in
regu
lar m
eetin
gs o
f th
e ba
nkin
g su
perv
isio
n au
thor
ities
of t
he S
outh
-Eas
t Eu
rope
. O
nwar
d FR
EIC
D
Stre
ngth
en re
latio
ns w
ith th
e C
entra
l Ban
k of
the
Repu
blic
of
Koso
vo
Broa
den
bila
tera
l coo
pera
tion,
exc
hang
ing
expe
rienc
e to
atta
in c
entra
l ban
king
mod
ern
prac
tices
and
st
anda
rds.
O
nwar
d FR
EIC
D
Stre
ngth
en c
oope
ratio
n an
d re
latio
ns w
ith in
tern
atio
nal
finan
cial
inst
itutio
ns s
uch
as th
e IM
F, W
B, B
IS
Tech
nica
l ass
ista
nce
prov
ided
by
the
IMF
in te
rms
of:
• M
onet
ary
polic
y ex
celle
nce;
• M
acro
econ
omic
mod
ellin
g an
d in
flatio
n fo
reca
stin
g;
• Ba
nkin
g su
perv
isio
n;
• Im
plem
enta
tion
of in
tern
atio
nal a
ccou
ntin
g an
d pa
ymen
t sta
ndar
ds;
• C
ompi
latio
n of
mon
etar
y an
d fin
anci
al s
tatis
tics
and
thos
e of
the
bala
nce
of p
aym
ents
acc
ordi
ng to
in
tern
atio
nal s
tand
ards
;•
Impl
emen
tatio
n of
Bus
ines
s C
ontin
uity
for t
he B
ank
of
Alba
nia.
Tech
nica
l ass
ista
nce
from
the
Wor
ld B
ank
in fo
reig
n re
serv
e m
anag
emen
t pro
cess
of t
he B
ank
of A
lban
ia
Com
mitm
ent o
f the
Ban
k of
Alb
ania
to m
eetin
g al
l the
ob
ligat
ions
ste
mm
ing
from
the
Ope
ratio
nal P
lan
for
Impl
emen
tatio
n of
FSA
P re
com
men
datio
ns, d
rafte
d in
co
oper
atio
n w
ith o
ther
resp
onsi
ble
inst
itutio
ns o
f the
co
untry
Th
e Ba
nk o
f Alb
ania
aim
s to
con
tinue
the
activ
e an
d co
ntrib
utor
y co
mm
itmen
t to
the
BIS,
par
ticip
atin
g in
BIS
’s
foru
ms
and
com
mitt
ees
with
non
-mem
bers
hip
stat
us.
Tech
nica
l ass
ista
nce
from
the
BIS
for s
tand
ardi
zing
pr
uden
tial r
egul
atio
ns o
n di
ffere
nt s
egm
ents
of t
he
finan
cial
sec
tor i
n ge
nera
l and
on
thos
e th
at a
re
resp
onsi
ble
for b
anki
ng s
yste
m s
uper
visi
on a
nd c
entra
l ba
nk g
over
nanc
e.
Onw
ard
FREI
CD
56
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Com
mun
icat
ion
Fost
er p
ublic
co
nfid
ence
in th
e in
stitu
tion
Que
stio
nnai
re re
sults
Pu
blis
h do
cum
ents
on
acco
mpl
ishm
ent o
f obj
ectiv
es; E
nhan
ce
trans
pare
ncy
on d
ecis
ion-
mak
ing
mat
ters
; Exp
lain
mon
etar
y po
licy
deci
sion
s.O
nwar
d FR
EIC
D, o
ther
de
partm
ents
Enha
nce
trans
pare
ncy
to th
e pu
blic
Rese
arch
on
estim
atin
g th
e tra
nspa
renc
y; A
naly
ses
on
ques
tionn
aire
resu
lts
Pres
s re
leas
es; P
ublic
sta
tem
ents
; Mon
etar
y po
licy
repo
rt; P
erio
dic
publ
icat
ions
; Edu
catio
nal p
ublic
atio
ns (d
esig
ning
pub
licat
ions
di
strib
utio
n po
licy)
; Im
prov
e w
eb s
ite.
Onw
ard
FREI
CD
; oth
er
depa
rtmen
ts a
ccor
ding
to
the
case
Rais
e th
e le
vel o
f pu
blic
kno
wle
dge
of
the
Bank
of A
lban
ia
Anal
yses
on
surv
eys
desi
gned
for t
his
purp
ose
Com
preh
ensi
ve e
duca
tiona
l pub
licat
ions
; Exp
ansi
on o
f gro
ups
of
inte
rest
and
thei
r ter
ritor
yO
nwar
d FR
EIC
D; o
ther
de
partm
ents
Enha
nce
inte
rnal
co
mm
unic
atio
n Ba
nk’s
inte
rnal
mag
azin
eQ
4, 2
009
FREI
CD
; oth
er re
leva
nt
depa
rtmen
ts
5�
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Lega
l ser
vice
Enha
nce
gove
rnan
ce
Dra
fting
pru
dent
ial l
egis
lativ
e po
licie
s by
th
e Ba
nk o
f Alb
ania
Prov
ide
in a
spe
cial
ised
way
ser
vice
s in
acc
orda
nce
with
th
e ef
fect
ive
lega
l fra
mew
ork.
O
nwar
d LD
in c
oope
ratio
n w
ith o
ther
uni
ts
Prot
ectio
n of
the
Bank
’s le
gal s
tatu
s Se
nsiti
vene
ss to
cha
nges
of e
xter
nal i
ndic
ator
s an
d in
tern
atio
nal s
tand
ards
to c
reat
e be
st p
ract
ices
in B
ank
of
Alba
nia’
s go
vern
ance
. As
surin
g an
d im
prov
ing
the
lega
l qua
lity
of
jurid
ical
act
sEn
hanc
e ef
ficie
ncy
of s
ervi
ces
and
prog
ram
s th
at s
uppo
rt th
e Ba
nk o
f Alb
ania
’s o
bjec
tives
.En
hanc
ing
trans
pare
ncy
in c
arry
ing
out
lega
l ser
vice
s by
def
inin
g cl
early
the
desi
red
outc
ome
of th
e su
pplie
d se
rvic
es
Rais
e pe
rform
ance
of t
he s
taff
carr
ying
out
lega
l ser
vice
at
the
Bank
of A
lban
ia.
Stre
ngth
en th
e le
gal
and
regu
lato
ry b
ase
at
the
Bank
of A
lban
ia
Stre
ngth
enin
g th
e le
gal i
ndep
ende
nce
of
the
Bank
of A
lban
ia
Cha
nges
to th
e La
w “
On
the
Bank
of A
lban
ia”
in th
e fra
mew
ork
of a
ppro
xim
atin
g th
e le
gisl
atio
n w
ith th
at o
f the
Eu
rope
an U
nion
and
the
Euro
pean
Cen
tral B
ank.
Appr
oxim
atin
g th
e ef
fect
ive
lega
l fra
mew
ork
at th
e Ba
nk o
f Alb
ania
with
th
e in
tern
atio
nal s
tand
ards
and
the
acqu
is
com
mun
auta
ire
Impr
ove
the
Bank
of A
lban
ia’s
sta
tute
for e
nhan
cing
the
Bank
of A
lban
ia’s
gov
erna
nce,
aim
ing
at im
prov
ing
the
oper
atio
nal a
nd a
dmin
istra
tive
proc
edur
es.
Q 4
, 201
0LD
Com
pile
and
app
rove
the
draf
t-law
“O
n th
e Pa
ymen
t Sy
stem
in th
e Re
publ
ic o
f Alb
ania
”.Q
4, 2
009
LD in
coo
pera
tion
with
PSD
Dis
cuss
the
Law
“O
n th
e pa
ymen
t sys
tem
in th
e Re
publ
ic
of A
lban
ia”
with
gro
ups
of in
tere
st, a
imin
g at
its
prop
er
impl
emen
tatio
n.Q
4, 2
010
LD in
coo
pera
tion
with
PSD
Lega
l ass
ista
nce
of in
tern
atio
nal f
acto
rs,
aim
ing
to a
chie
ve c
ompl
ianc
e w
ith ju
ridic
al
stan
dard
s th
at e
nsur
e en
hanc
emen
t of
lega
l ind
epen
denc
e of
the
Bank
Stre
ngth
en th
e le
gal i
nitia
tive
of th
e Ba
nk o
f Alb
ania
to
nego
tiate
and
dra
ft th
e le
gal a
nd re
gula
tory
fram
ewor
k on
th
e ba
nkin
g an
d fin
anci
al s
yste
ms.
Onw
ard
LD
5�
Stre
ngth
en p
riorit
ies
in th
e fra
mew
ork
of c
oope
ratin
g an
d co
ordi
natin
g w
ith th
e ba
nkin
g sy
stem
act
ors,
in th
e co
untry
an
d be
yond
it. O
rgan
ise
the
Regi
onal
Con
fere
nce
on
cent
ral b
ank
lega
l asp
ects
.
Onw
ard
LD
Stre
ngth
en th
e re
latio
ns a
nd e
xcha
nge
expe
rienc
e be
twee
n th
e LD
and
its
coun
terp
artie
s in
oth
er c
entra
l ban
ks.
Onw
ard
LD
Stre
ngth
en ri
sk
man
agem
ent
Stan
dard
izat
ion
of th
e le
gal o
pini
ons,
ai
min
g at
con
solid
atin
g th
e ba
nkin
g rig
htId
entif
y le
gal r
isk.
Onw
ard
LD
Prud
entia
l mon
itorin
g of
issu
es re
gard
ed a
s po
sing
lega
l ris
kD
evel
op a
nd im
prov
e th
e re
gula
tory
fram
ewor
k of
risk
m
anag
emen
t at t
he B
ank
of A
lban
ia.
Onw
ard
LD
Enha
ncem
ent o
f app
ropr
iate
jurid
ical
ca
paci
ties
to a
chie
ve s
tand
ards
Anal
yse
and
mod
el th
e le
gal r
isk
type
.O
nwar
d LD
Prop
ose
conc
rete
mea
sure
s an
d ris
k m
anag
emen
t ter
ms
in
com
plia
nce
with
the
Bank
of A
lban
ia’s
dev
elop
men
ts.
Onw
ard
LD
Incl
ude
lega
l ser
vice
in th
e pr
oces
s of
mon
itorin
g ot
her
risk
type
s, in
col
labo
ratio
n w
ith o
ther
uni
ts o
f the
Ban
k of
Al
bani
a.O
nwar
d LD
59
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Hum
an
Reso
urce
sTr
aini
ng a
nd
qual
ifica
tion
New
em
ploy
men
t pol
icie
s20
09 a
nd
onw
ard
HRD
Rais
e th
e nu
mbe
r of t
rain
ings
org
anis
ed b
y th
e Ba
nk
HRD
Car
eer
man
agem
ent
Rise
in th
e nu
mbe
r of s
taff
with
ac
adem
ic d
egre
es (M
aste
r, Ph
D, e
tc.)
Prep
are
regu
lato
ry a
cts
need
ed fo
r im
plem
enta
tion
Q 4
, 200
9 an
d on
war
dH
RD
Rise
in th
e nu
mbe
r of r
esea
rch
and
anal
ytic
pub
licat
ions
Revi
ew, w
ith th
e pu
rpos
e to
impr
ove
the
rew
ards
sys
tem
and
add
ition
s to
sal
ary
on th
e ba
sis
of q
ualif
icat
ions
and
sci
entif
ic d
egre
es o
f eac
h em
ploy
ee, w
ho h
as c
ompl
eted
pos
t-uni
vers
ity s
tudi
es a
nd w
ho c
ontin
ues
to
cond
uct r
esea
rch
by p
ublis
hing
var
ious
arti
cles
.
Q 2
, 200
9 an
d on
war
dH
RD
Enha
ncem
ent
of re
sear
ch
Rise
in th
e nu
mbe
r of e
mpl
oyee
s, w
ho
will
mak
e pu
blic
atio
nsQ
2, 2
009
and
onw
ard
HRD
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Inte
rnal
Aud
it Re
stru
ctur
e In
tern
al A
udit
Dep
artm
ent
Supe
rvis
ory
Cou
ncil’
s de
cisi
onPr
esen
t the
pro
posa
l by
IAD
to th
e H
RD
Pres
ent t
he p
ropo
sal b
y H
RD to
the
SC.
Q 1
, 200
9G
ener
al In
spec
tor
HRD
Dra
ft a
Man
ual o
f Pol
icie
s M
anua
l of P
olic
ies
Dra
ft th
e M
anua
l of P
olic
ies.
Q 2
, 200
9G
ener
al in
spec
tor
IAD
Revi
ew a
nd c
ompl
ete
the
Man
ual o
f In
tern
al A
udit
Polic
ies
and
Proc
edur
esM
anua
l of P
roce
dure
sRe
view
the
Man
ual o
f Pro
cedu
res.
Q 2
, 201
1G
ener
al in
spec
tor
IAD
Asse
ss in
tern
al a
udit
qual
ityC
ondu
ctin
g qu
ality
ass
essm
ent a
udits
C
arry
out
inte
rnal
ass
essm
ent.
Q 1
, 201
0IA
DG
ener
al in
spec
tor
Car
ry o
ut e
xter
nal a
sses
smen
t.Q
4, 2
011
Gen
eral
insp
ecto
rIA
D
Prom
ote
inte
rnal
aud
it ac
tivity
Pu
blic
atio
ns a
nd s
emin
ars
Prep
are
expl
anat
ory
leaf
lets
.Q
2, 2
009
Gen
eral
insp
ecto
rIA
D
Prom
ote
inte
rnal
aud
it ac
tivity
Pu
blic
atio
ns a
nd s
emin
ars
Org
aniz
e ex
plan
ator
y se
min
ars.
Q 4
, 200
9G
ener
al in
spec
tor
IAD
60
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Info
rmat
ion
tech
nolo
gy
Tran
sfer
com
pute
r inf
rast
ruct
ure
to
two
new
bui
ldin
gs a
nd m
ake
onlin
e co
nnec
tion
with
the
bran
ches
.
Des
ign
the
netw
ork
topo
logy
in th
e ne
w b
uild
ings
; Pre
pare
th
e se
cond
room
of c
entra
l equ
ipm
ent a
t X b
uild
ing;
Pre
pare
th
e fir
st ro
om o
f cen
tral e
quip
men
t in
the
new
bui
ldin
g; S
et
up c
omm
unic
atio
n in
frast
ruct
ure
at a
ll th
e Ba
nk’s
bui
ldin
gs in
Ti
rana
, and
at t
he B
ank’
s br
anch
es.
Q 4
, 200
9IT
D, A
D, S
TD
Fore
ign
curr
ency
rese
rve
man
agem
ent
ToR,
tech
nica
l spe
cific
atio
ns, p
rocu
rem
ent,
impl
emen
tatio
n of
so
lutio
n Q
4, 2
010
ITD
, MO
D, A
D,
PSD
, AFD
Expa
nd c
ompu
ter i
nfra
stru
ctur
e fo
r co
llect
ing,
pro
cess
ing
and
anal
ysin
g st
atis
tical
indi
cato
rs.
Dat
abas
e of
indi
cato
rs
prod
uced
by
the
Bank
of
Alb
ania
: -B
anki
ng, m
onet
ary,
fin
anci
al in
dica
tors
;-
Exte
rnal
sec
tor
indi
cato
rs: b
alan
ce
of p
aym
ents
, in
tern
atio
nal p
ositi
on
of in
vest
men
ts,
exte
rnal
deb
t
It is
cur
rent
ly a
t the
sta
ge o
f ana
lysi
ng e
xpec
ted
chan
ges
Q 4
, 201
1IT
D, S
TD, S
D
Risk
ana
lysi
s in
info
rmat
ion
tech
nolo
gy20
10IT
D
6�
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Secu
rity
Enha
nce
the
gove
rnan
ce
Impr
ovem
ent o
f the
Ban
k’s
secu
rity
and
prot
ectio
n, a
djus
ting
it to
EC
B’s
stan
dard
s
Plan
sem
inar
s an
d w
orks
hops
with
cou
nter
party
stru
ctur
es o
f ce
ntra
l ban
ks, t
o ex
chan
ge in
form
atio
n an
d ex
perie
nce
rela
ted
to s
ecur
ity a
nd p
rote
ctio
n st
anda
rds
in a
ccor
danc
e w
ith E
CB’
s cr
iteria
, to
prec
ede
acce
ss to
the
Euro
-zon
e.
Onw
ard
SPD
Rise
of p
rofe
ssio
nal i
ndic
ator
s an
d co
re
train
ings
of t
he S
PD s
taff
Anal
yse
the
SPD
’s o
rgan
isat
iona
l stru
ctur
e fu
nctio
ning
, poi
ntin
g ou
t any
def
icie
ncie
s.
Onw
ard
Re-c
once
ptio
n of
the
SPD
’s o
rgan
isat
iona
l st
ruct
ure,
to e
nsur
e ph
ysic
al a
nd e
lect
roni
c pr
otec
tion
of th
e Ba
nk o
f Alb
ania
, of i
ts
bran
ches
and
obj
ects
Dra
ft a
new
stru
ctur
e ac
cord
ing
to s
tand
ards
.O
nwar
d
Appl
icat
ion
of u
pdat
ed te
chno
logy
sta
ndar
ds
for e
lect
roni
c pr
otec
tion
and
secu
rity
of
info
rmat
ion
Prep
are
and
appr
ove
the
elec
troni
c pr
otec
tion
syst
ems
proj
ects
of
the
Bank
of A
lban
ia a
nd it
s ob
ject
ives
, as
wel
l as
of th
e m
onet
ary
valu
es p
rote
ctio
n sy
stem
dur
ing
thei
r tra
nspo
rtatio
n.
Onw
ard
Stre
ngth
en
the
lega
l and
re
gula
tory
bas
e at
the
Bank
of
Alba
nia
Impr
ovem
ent o
f the
lega
l bas
e an
d re
gula
tions
of t
he S
PDPr
epar
e dr
afts
for n
eces
sary
impr
ovem
ent o
f the
SPD
’s re
gula
tory
ba
se.
Prep
are
deed
s of
agr
eem
ent w
ith o
ther
inst
itutio
ns th
at
colla
bora
te w
ith th
e Ba
nk o
f Alb
ania
, to
carr
y ou
t the
Ban
k’s
lega
l ob
ligat
ions
and
ens
ure
its s
moo
th o
pera
tion.
Dra
ft an
d ap
prov
e th
e SP
D’s
recr
uitm
ent a
nd s
elec
tion
proc
edur
e.
Def
ine
the
SPD
’s re
crui
tmen
t crit
eria
and
test
ing
of n
ew e
ntrie
s,
acco
rdin
g to
func
tiona
l tas
ks fo
r eac
h w
ork
posi
tion.
Tr
ain
perio
dica
lly th
e SP
D’s
sta
ff, to
acq
uire
kno
wle
dge
on a
nd
use
the
new
ele
ctro
nic
prot
ectio
n te
chno
logy
inst
alle
d at
the
Bank
of
Alb
ania
pre
mis
es a
nd it
s ob
ject
s.
Mon
itor t
he S
PD’s
ope
ratio
ns.
Impr
ove
the
com
mun
icat
ion
syst
em a
mon
g SP
D’s
stru
ctur
es a
t br
anch
es a
nd o
bjec
ts a
nd re
spon
sibl
e St
ate
Polic
e st
ruct
ures
.
Stre
ngth
en ri
sk
man
agem
ent
Risk
ana
lyse
s an
d pr
iorit
y di
rect
ions
of
inte
rven
tion
Prep
are
and
appr
ove
a se
curit
y an
d pr
otec
tion
plan
of t
he B
ank
of A
lban
ia a
nd it
s ob
ject
s in
nor
mal
situ
atio
ns a
nd in
cris
is a
nd
emer
genc
y si
tuat
ions
.
Car
ry o
ut tr
aini
ng in
intro
duct
ion
to o
pera
tions
dur
ing
cris
is a
nd
emer
genc
y si
tuat
ions
(fire
, ear
thqu
ake)
and
eva
cuat
ion
of th
e Ba
nk o
f Alb
ania
.
6�
FUN
CTI
ON
OBJ
ECTI
VEIN
DIC
ATO
RM
EASU
RESC
HED
ULE
RESP
ON
SIBL
E U
NIT
Adm
inis
tratio
nIm
prov
e w
orki
ng c
ondi
tions
at t
he
Bank
of A
lban
ia in
com
plia
nce
with
EU
sta
ndar
ds.
Reco
nstru
ctio
n of
the
exis
ting
build
ing
and
cons
truct
ion
of a
new
bui
ldin
g at
th
e Ba
nk’s
pre
mis
es in
Tira
na
Proj
ect c
ompl
etio
n Q
2, 2
009
AD
Plac
e up
date
d te
chno
logy
in
acco
rdan
ce w
ith E
U s
tand
ards
, for
bo
th, s
taff
wor
king
con
ditio
ns a
nd
the
plan
t and
tech
nolo
gica
l sys
tem
s of
the
Bank
of A
lban
ia.
Dra
ft an
d st
art t
he te
nder
pro
cedu
res
for p
roje
ct
impl
emen
tatio
n.
Q 2
, 200
9AD
Com
plet
e th
e te
nder
pro
cedu
res,
pur
sue
the
wor
ks
for t
heir
cons
truct
ion
and
com
plet
ion.
Q
4, 2
009
– Q
4, 2
011
AD
Con
stru
ctio
n of
a n
ew b
uild
ing
of th
e Is
sue
Dep
artm
ent
Com
plet
e th
e te
nder
pro
cedu
res,
pur
sue
the
wor
ks
for p
roje
ct e
xecu
tion
and
com
plet
ion.
Q
III,
2009
–
Q 3
, 201
1AD
Tran
sfer
tech
nolo
gy a
nd a
ctiv
ity o
f the
Issu
e D
epar
tmen
t to
the
new
bui
ldin
g.
Q 3
, 201
1AD
, ITD
, ID
Tran
sfer
of t
he B
ank’
s ac
tivity
from
the
head
offi
ce, b
ecau
se o
f rec
onst
ruct
ion
Car
ry o
ut th
e pr
oced
ure
for p
urch
asin
g or
rent
ing
new
pre
mis
es.
Q 3
, 200
9AD
Car
ry o
ut c
onst
ruct
ive
adju
stm
ents
and
tran
sfer
of
tech
nolo
gica
l pla
nts
and
the
Bank
’s a
ctiv
ity to
ab
ove-
men
tione
d pr
emis
es.
Q 3
, 200
9AD
, ITD
, ID
Car
ry o
ut c
onst
ruct
ive
wor
ks fo
r ada
ptin
g th
e pr
intin
g-ho
use
build
ing
to th
e fu
nctio
n of
the
Issu
e D
epar
tmen
t and
tran
sfer
the
latte
r one
. Q
2-3
, 200
9AD
, ITD
, ID
6�
64