Despite these positive effects, the presence of foreign banks in the country instigates improvements in the institutional framework, by pushing the application of international accounting, reporting and supervision standards, which does not only help the commercial banks’ decision-making process but also the central bank’s. Therefore, the FDIs are expected not only to promote the production activity in the country, but also to have a direct and indirect impact on the Albanian financial system. Foreign production companies will directly need financial transfers and services (channel payrolls through the ATMs, POS), which will be executed through the domestic financial system. The international companies investing in the country will make use of commercial banks’ funding sources in order to prevent exchange rate and interest rate risk. There have been many property-related developments in the Albanian banking system. Since its establishment, the domination of state-owned banks has been reducing and today, foreign commercial banks’ assets account for over 90 per cent of the banking system. The increase in the number of foreign banks in the system has been also favoured by the fact that such investments have not been penalized in Albania; the requirements for establishing a bank are similar for both domestic and foreign-owned banks. 2  BIS Review 102/2007  The current ownership is diverse; there are foreign investors from Austria, Italy, Greece, USA, Turkey, Germany, Bulgaria, Malaysia and some Arab countries.
But now that the fence is up, we need it to do its job. It is of course a twenty-first century, modern fence – not a medieval stone wall, and as part of this it was electrified by Parliament in order to discourage attempts to  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  climb over it: the legislation empowers the PRA to use a group restructuring tool to require a banking group to sell its ring-fenced bank or other parts of its group. Hopefully the prospect of electrocution will discourage any blatant attempts to climb over the fence. But there is still perhaps the possibility of wicked burrowing under the fence, passing things through it or even perhaps using a drone to create mischief. We are therefore setting up a border patrol of PRA staff who will police the fence. The patrol will ensure there is compliance with restrictions on activities performed by the ring-fenced entities and independence from the rest of the group. In particular, we will closely monitor governance arrangements, seeking evidence that ring-fenced banks can identify conflicts of interest and are able to make decisions on their own. We will set capital and liquidity for the ring-fenced banks, and more generally keep an eye on the risks they face. Let me move to my second example: accountability. As with the ring-fence, we and firms have gone to great lengths to bring in the Senior Managers Regime here in the UK.