Moral hazard may be related to single institutions that take on too much risk. In these cases, it is manageable. Central bank measures are formulated in such a way that shareholders, management and staff, and probably also lenders, suffer substantial losses. There is no such thing as comprehensive insurance. It is more complicated when banks herd with other banks in taking on excessive risk. This herd behaviour was described by John M. Keynes in 1931: “A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.” 4 Note that a banker’s reputation might thus be intact, although not her job or assets. The management of the Nordic banking crisis also showed that it is possible to respond in order to reduce moral hazard, i.e. reduce the risk of a repetition of the herd behaviour that led to the crisis. Expectations of a slowdown as a result of falling house prices in the US have resulted in some increase in credit premia in Norway as well. Equity prices on the Oslo Stock Exchange fell considerably during the turbulence, but have recently picked up again somewhat. The spread of market turbulence to Norwegian financial institutions is a pure contagion effect. Surveys by Kredittilsynet (Financial Supervisory Authority of Norway) show that Norwegian banks are not directly exposed to losses related to the US subprime market.
It must be noted that the above-cited initiatives, formalised in the relevant national strategy, have been substantially supported by renowned international institutions such as the World Bank, the European Central Bank, and central banks from EU countries. Hence, let me now extend my sincere appreciation to these institutions for their support, and to their distinguished representatives who will share with you today their experience in the development of retail payment systems market. From the perspective of communication and cooperation, the regional cooperation and sharing of experiences is deemed as very important and fruitful. As a result of market development and cultural characteristics and financial education level in the countries of our region, experience sharing assumes particular importance, as it may contribute significantly to achieving the goals more effectively. Last but not least, another development is the joint initiative of the Bank of Albania, Ministry of Finance and Economy, and Minister of State for Diaspora for a higher attention related to attracting and effectively using remittances, as a component of retail payments. At the international level, remittances make a significant contribution to the economy and welfare of the people, and are considered as accelerators to financial inclusion. The Bank of Albania, therefore, in addition to the aimed developments in the national strategy for reforming the retail payment systems, is engaged in preparing an annual publication on remittances.