When drafting this objective, the Government was clear that maintaining core services should be a central pillar of the PRA’s safety and soundness objective, and not an additional obligation. This means the PRA will apply its existing supervisory approach to meeting our ring-fencing responsibilities. We will use this approach to focus on the biggest risks to ring-fenced banks and the integrity of their ring-fences. Ring-fencing expands the scope of the requirements with which ring-fenced banks need to comply, and that the PRA needs to supervise. But it would be a mistake to believe that the aim of ring-fencing was to create ‘bullet-proof’ banks to which the PRA could apply a lighter-touch model of supervision. Ring-fenced banks – like all financial firms – will take risks, and those risks need to be managed and mitigated by the banks. The PRA’s risk-based approach to supervision also means that the PRA will continue to focus on those banks which pose the greatest risks to the financial system. This would include banks which sit outside of the ring-fences of banking groups where they are important providers of critical economic functions such as lending to large corporates or intermediating in financial markets. And ring-fencing has brought about the creation of additional legal entities within our banking groups which will need to be supervised and meet prudential requirements on an individual basis. Previously, a universal bank could carry out all of its activities within a single legal entity, and face one set of prudential requirements.
Gent Sejko: Fourth review of the arrangement with the IMF concluded Speech by Mr Gent Sejko, Governor of the Bank of Albania, at the joint press conference with the IMF mission, Albanian MoF and MEDTTE, Tirana, 17 March 2015. *  *  *  Dear media representatives, During the last two weeks, an International Monetary Fund (IMF) team visited Tirana, to conduct, together with Albanian authorities, the fourth review of the arrangement. In Bank of Albania’s perspective, the economic and financial developments have been relatively positive. Notwithstanding the problems the Albanian economy has encountered, it has recorded growth and a range of economic and financial balances of the country have improved. The economic policies and the legal, regulatory and institutional reforms by the Albanian authorities have played a significant role in this regard. These development policies are anchored in the arrangement that Albania has with the IMF and have benefited from the credibility and financial assistance of the International Monetary Fund and World Bank. The Bank of Albania deems that the reforms that Albania has started should continue, to provide sustainable and long-term growth. I would like now to outline Bank of Albania’s opinion on the country’s economic and financial situation, and to list the priorities of our work in the framework of this arrangement. The Albanian economy posted growth in 2014, which is expected to further accelerate in 2015.