The Bank of Albania ( sq, Banka e Shqipërisë) is the
central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
of
Albania
Albania ( ; sq, Shqipëri or ), or , also or . officially the Republic of Albania ( sq, Republika e Shqipërisë), is a country in Southeastern Europe. It is located on the Adriatic and Ionian Seas within the Mediterranean Sea and shares ...
. Its main headquarters are in Tirana, and the bank also has five other branches located in
Shkodër
Shkodër ( , ; sq-definite, Shkodra) is the fifth-most-populous city of the Republic of Albania and the seat of Shkodër County and Shkodër Municipality. The city sprawls across the Plain of Mbishkodra between the southern part of Lake Shkod ...
,
Elbasan
Elbasan ( ; sq-definite, Elbasani ) is the fourth most populous city of Albania and seat of Elbasan County and Elbasan Municipality. It lies to the north of the river Shkumbin between the Skanderbeg Mountains and the Myzeqe Plain in central Al ...
,
Gjirokastër
Gjirokastër (, sq-definite, Gjirokastra) is a city in the Republic of Albania and the seat of Gjirokastër County and Gjirokastër Municipality. It is located in a valley between the Gjerë mountains and the Drino, at 300 metres above sea le ...
,
Korçë
Korçë (; sq-definite, Korça) is the eighth most populous city of the Republic of Albania and the seat of Korçë County and Korçë Municipality. The total population is 75,994 (2011 census), in a total area of . It stands on a plateau some ...
, and
Lushnjë
Lushnjë (; in Lushnje's own dialect: ''Lushnje'' ; sq-definite, Lushnja) is a city and municipality in west-central Albania. It is located in the County of Fier. The total population is 83,659 (2011 census), in a total area of .
History
...
, while its Research and Training Center is located in
Berat
Berat (; sq-definite, Berati) is the ninth most populous city of Albania and the seat of Berat County and Berat Municipality. By air, it is north of Gjirokastër, west of Korçë, south of Tirana, and east of Fier.
Berat is located in th ...
.
History
![Banka e Shtetit Shqipëtar 01](https://upload.wikimedia.org/wikipedia/commons/d/da/Banka_e_Shtetit_Shqip%C3%ABtar_01.jpg)
In the first few years following
Albania's declaration of independence on 28 December 1912, the fledgling country lacked a central bank. Under
Ismail Qemali
Ismail Qemal bey Vlora, mostly known as Ismail Qemali (; 16 January 184426 January 1919), was an Albanian diplomat, politician, rilindas, statesman and the Founding Father of modern Albania, and one of the most famous Southern Albanian person. Th ...
's leadership a first central bank was created on 4 October 1913 but it only lasted a few months.
In the early 1920s, foreign currency was used for all transactions, generating considerable chaos, and in 1923 municipalities were allowed to issue their own banknotes. One project floated by the
League of Nations
The League of Nations (french: link=no, Société des Nations ) was the first worldwide intergovernmental organisation whose principal mission was to maintain world peace. It was founded on 10 January 1920 by the Paris Peace Conference that ...
envisaged a central bank for Albania as a cooperative venture co-sponsored by various European governments, with Albania itself owning only 10 percent of its share capital.
The consolidation of the Albanian national government eventually allowed for the creation of a central bank on 2 September 1925, called the National Bank of Albania ( sq, Banka Kombëtare e Shqipnis, it, Banca Nazionale d’Albania). In line with a shareholders' convention involving the Albanian government and concluded in March 1925, the National Bank's original share capital was held by a mix of Italian, Yugoslav and Albanian partners plus minority stakes of the
Basler Handelsbank and
Société Générale de Belgique
The ' ( nl, Generale Maatschappij van België; literally "General Company of Belgium") was a large Belgian bank and later holdings company which existed between 1822 and 2003.
The ''Société générale'' was originally founded as an investme ...
, in which the Italian interests dominated. Unusually for a central bank, the National Bank was not only independent from the Albanian government, but it was also a foreign institution, with legal seat in Rome and led by an Italian official:
this was explicitly inspired by the precedent of the
State Bank of Morocco
The State Bank of Morocco (french: Banque d'État du Maroc) was a quasi-central bank established in 1907 following the Algeciras Conference, to stabilize the Moroccan currency and serve as a vehicle for European and especially French influence ...
, whose board met in Paris even though its registered headquarter was in
Tangier
Tangier ( ; ; ar, طنجة, Ṭanja) is a city in northwestern Morocco. It is on the Moroccan coast at the western entrance to the Strait of Gibraltar, where the Mediterranean Sea meets the Atlantic Ocean off Cape Spartel. The town is the cap ...
. The National Bank's founding meeting and subsequent meetings of its governing body () were correspondingly held in
Rome
, established_title = Founded
, established_date = 753 BC
, founder = King Romulus (legendary)
, image_map = Map of comune of Rome (metropolitan city of Capital Rome, region Lazio, Italy).svg
, map_caption ...
, where the seat of the National Bank of Albania appears to have been located on
Piazza dell'Esedra, at the corner with the
Via Nazionale and thus not far from the
Bank of Italy
The Bank of Italy (Italian: ''Banca d'Italia'', informally referred to as ''Bankitalia''), (), is the central bank of Italy and part of the European System of Central Banks. It is located in Palazzo Koch, via Nazionale, Rome. The bank's curre ...
.
The National Bank's central office in Albania was in
Durrës
Durrës ( , ; sq-definite, Durrësi) is the second most populous city of the Republic of Albania and seat of Durrës County and Durrës Municipality. It is located on a flat plain along the Albanian Adriatic Sea Coast between the mouths of ...
, opened on 29 November 1925. The bank opened further branches in
Shkodër
Shkodër ( , ; sq-definite, Shkodra) is the fifth-most-populous city of the Republic of Albania and the seat of Shkodër County and Shkodër Municipality. The city sprawls across the Plain of Mbishkodra between the southern part of Lake Shkod ...
on 1 November 1926, in
Vlorë
Vlorë ( , ; sq-definite, Vlora) is the third most populous city of the Republic of Albania and seat of Vlorë County and Vlorë Municipality. Located in southwestern Albania, Vlorë sprawls on the Bay of Vlorë and is surrounded by the foothi ...
on 15 November 1926, and subsequently in
Berat
Berat (; sq-definite, Berati) is the ninth most populous city of Albania and the seat of Berat County and Berat Municipality. By air, it is north of Gjirokastër, west of Korçë, south of Tirana, and east of Fier.
Berat is located in th ...
,
Elbasan
Elbasan ( ; sq-definite, Elbasani ) is the fourth most populous city of Albania and seat of Elbasan County and Elbasan Municipality. It lies to the north of the river Shkumbin between the Skanderbeg Mountains and the Myzeqe Plain in central Al ...
,
Korçë
Korçë (; sq-definite, Korça) is the eighth most populous city of the Republic of Albania and the seat of Korçë County and Korçë Municipality. The total population is 75,994 (2011 census), in a total area of . It stands on a plateau some ...
, and
Sarandë
Sarandë (; sq-definite, Saranda; el, Άγιοι Σαράντα, Ágioi Saránta) is a city in the Republic of Albania and seat of Sarandë Municipality. Geographically, the city is located on an open sea gulf of the Ionian Sea within the Medit ...
. Its new headquarters building on
Skanderbeg Square
The Skanderbeg Square () is the main plaza in the centre of Tirana, Albania. The square is named after the Albanian national hero Gjergj Kastrioti Skënderbeu. The total area is about 40,000 square metres. The Skanderbeg Monument dominates the ...
in
Tirana
Tirana ( , ; aln, Tirona) is the capital and largest city of Albania. It is located in the centre of the country, enclosed by mountains and hills with Dajti rising to the east and a slight valley to the northwest overlooking the Adriatic Sea ...
was inaugurated on 30 October 1938, on a
rationalist design elaborated between 1930 and 1936 by Italian architect
Vittorio Ballio Morpurgo
Vittorio Ballio Morpurgo (Rome, 1890 - Rome, 1966) was an Italian architect
Following is a list of Italian architects.
Early architects
* Marcus Agrippa
* Vitruvius
Medieval architects
*Arnolfo di Cambio
* Pietro Baseggio
* Giotto ...
, who had also designed the branch offices in Durrës and Korçë. The Tirana seat took over the Albanian central functions previously located in Durrës.
Under the
Italian protectorate of Albania (1939–1943)
The Italian protectorate of Albania, also known as the Kingdom of Albania or Greater Albania, existed as a protectorate of the Kingdom of Italy. It was practically a union between Italy and Albania, officially led by Italy's King Victor Emmanu ...
, the National Bank also opened a branch in
Prizren
)
, settlement_type = Municipality and city
, image_skyline = Prizren Collage.jpg
, imagesize = 290px
, image_caption = View of Prizren
, image_alt = View of Prizren
, image_flag ...
which had then been annexed to Albania, and the extension of its activity to
Montenegro
)
, image_map = Europe-Montenegro.svg
, map_caption =
, image_map2 =
, capital = Podgorica
, coordinates =
, largest_city = capital
, official_languages = M ...
was briefly considered as well. Under the
German occupation of Albania
The German occupation of Albania occurred between 1943 and 1944 during World War II. Before the armistice between Italy and the Allied armed forces on 8 September 1943, Albania had been in a de jure personal union with and was de facto under t ...
, the National Bank kept operating but under increasingly difficult conditions, and was forced by the occupiers to transfer its gold reserves from Rome to Berlin.
Following the country's liberation from German occupation in late 1944, the Albanian operations of the National Bank were nationalized on 13 January 1945 and renamed the State Bank of Albania ( sq, Banka e Shtetit Shqiptar). The National Bank's Italian legal entity was liquidated in 1957.
In 1992, a new banking system was established, with the central bank renamed the Bank of Albania. In 1996, an agreement was reached to return most of the former National Bank's gold reserves to Albania.
The headquarters building of the Bank of Albania was renovated and expanded in the early 2010s on a design by the Italian firm
Petreschi Architects.
Bank overview
The bank's primary objective is the maintenance of price stability. The bank also promotes and supports the development of the foreign exchange regime and system, the domestic financial market, the payment system, and contributes to improving monetary and lending conditions.
The Bank also acts as manager of the county's currency by balancing the currency in circulation and credit within the economy. This role is important because allowing too much currency into circulation would lead to inflation and allowing too little currency in circulation would prevent the economy from growing. As acting currency manager, the Bank of Albania pursues to reach equilibrium between two extremes, which is to promote economic growth by maintaining price stability.
The Bank also acts as the fiscal agent of the Albanian Government. Since being the central Bank of Albania, the bank performs a wide range of financial services dealing with billions of Albanian Leks. The government keeps an open account with the bank, through which it makes many domestic and international financial transactions. The Treasury operations, which consist of receipts and expenses made by the government is not carried out within the Bank of Albania, but through commercial banks.
Supervisory role
The Bank of Albania supervises and regulates all activity of banks and institutions operating banking activity within the country. The Bank of Albania enforces rules on the establishment of banks and institutions and licenses them. The bank also supervises and monitors all activity of these institutions to ensure that they follow and obey the laws and regulations.
The central bank supervises the banking system for the following purposes:
*to promote stability of the banking system and to protect the interests of depositors and the general public;
*to ensure a sound banking system whose activities are transparent to and governed by market economy;
*to provide an environment of confidence for investors and depositors while enabling growth and profitability for the industry.
The role of banking supervision is to promote safety and soundness by:
*ensuring through a licensing process that only fit and proper owners and management, that fulfill the legal, professional and ethical requirements, have the right to enter the banking market; and that they have adequate capital in line with the risks to be undertaken, and have operating policies and procedures to control those risks;
*ensuring that existing banks operate soundly in accordance with law and regulations, have adequate capital and liquidity for foreseeable needs, maintain satisfactory asset quality and adequate resources to offset perceived risks, exercise international standards for best practice in the management of their activities, and conduct their affairs in a manner that is not harmful to clients and general public;
*ensuring that banking problems are resolved quickly and efficiently in a manner that protects depositors to the fullest extent possible, and minimizes the cost to Government and public.
To fulfill this role, banking supervision:
*drafts and revises regulations governing entry to the system, prudential operation of banking activities while in the system, monitors the results achieved, receivership and conservation-ship of banks, and enforces compliance with those laws and regulations;
*establishes pro-active policies and strategies for the supervision of individual banks and the banking system that are based upon an assessment of inherent risks;
*develops supervisory procedures, standards and guidelines that are consistent with international practice;
*implements those procedures, standards and guidelines consistently;
*assures adequacy of staff in terms of number and proficiency to properly supervise the industry;
*sponsors and participates in regular communications with the industry and other supervisors on matters of common interest or concern.
Monetary policy
The
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
of Albania is an exclusive right of the Bank of Albania. The Policy is designed to achieve the primary goal, to achieve and maintain price stability. The architect of coming up with the policy is based on, the respective legal framework, the academic background employed for modeling and predicting inflation on suitability of the operational target and the set of monetary instruments used to finalize the monetary policy goals. The Bank of Albania is committed to achieving and maintaining annual inflation at 3.0%, with a tolerance band of +/- 1 percentage point. The annual inflation for the third quarter of 2014 was 1.7%.
The Bank of Albania manages open market operations through the purchase or sale of securities. These transactions play a main role in the transmission of monetary policy in the banking system. The main reason of using open market operations is the short-term liquidity management of the banking system and trying to stabilize market interest rates. The standing facilities are tools available to banks at their own initiative without restriction under normal circumstances. They consist of tools providing and absorbing overnight liquidity. The interest rates and these tools provide a passage in which the money market interest rates can fluctuate. The minimum reserve requirements serve as a tool targeting at regulating the banking system liquidity and stabilizing the money market interest rates. The amount of minimum reserves to be held by each commercial bank is determined in relation to its reserve base applying the required reserve ratio. This ratio is also the same for the Lek and foreign currency liabilities. The current required ratio is 10 percent. The Bank of Albania's minimum reserve system allows banks to use the averaging provisions. Banks are allowed to 40 percent if their required reserve. They must show the average of the reserve balance will not be less than the reserve requirement by the end of the maintenance period. Required reserves denominated in the Albanian currency are reimbursed at a rate derived from the base rate, while holdings of required reserves in foreign currency are also reimbursed at a rate derived from the base rate of the European Central Bank and Federal Reserve.
Governors
See also
*
Economy of Albania
The economy of Albania went through a process of transition from a centralized economy to a market-based economy on the principles of the free market.
Albania's economy is based on the service (54.1%), agriculture (21.7%), and industrial (24. ...
*
Albanian lek
The lek (; indefinite singular ''lek'', definite plural ''lekët'', indefinite plural ''lekë''; sign: Lekë in Albanian or Lek in English, sometimes L; code: ALL) is the currency of Albania. Historically, it was subdivided 100 ''qintars'' (; ...
*''
''
References
External links
*
The Bank of AlbaniaRetrieved on 01-03-2009.
{{Authority control
Central banks
1925 establishments in Albania
Banks established in 1925
Banks of Albania