Particular attention has been paid to the examination of banks with a major share in the activity of the financial market, those subject to acquisition or merger processes, or banks experiencing rapid growth. Overall, the monitored institutions have responded duly to the recommendations, by undertaking the relevant measures. Increased attention has been paid to the supervision for the implementation of measures for the prevention of money laundering, in cooperation with the Directorate General on the Prevention of Money Laundering (DG PML). Cooperation with the DG PML was more intensive in the framework of the evaluation process for Albania by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL). The Bank of Albania participated actively in fulfilling the comments related to the technical and effectiveness questionnaires. In the final MONEYVAL report, the effectiveness level of financial institutions was rated as “substantial/considerable”. In particular, banks show better awareness of the AML/CFT risks and of legal obligations, and have generally taken due measures in a way that is commensurate to the assessed level of AML/CFT risk. The evaluation process was accompanied by a plan of measures for addressing the main problems identified in the report; their realisation will continue in 2019 as well. In the framework of consolidation in the banking sector, in 2018 some changes took place in the ownership structure of the banking system. As a result of these changes, 14 banks operated in the Albanian banking system as at the end of the year.
These shocks led to a temporary imbalance of the demand and supply for foreign currency and contributed to creating expectations for further appreciation of the exchange rate, and were accompanied also by a change in the behaviour of certain operators in the economy. They initiated a fast appreciation spiral in the second quarter and were accompanied by a disorder of the functioning of the domestic foreign exchange market. Under these circumstances, the Supervisory Council judged that the rapid appreciation of the exchange rate jeopardised the achievement of our inflation target in the medium-term horizon. Consequently, in full compliance with the price stability objective and without affecting the free exchange rate regime, in June the Council decided: To lower the policy rate from 1.25% to 1.00%. In parallel, overnight loan and overnight deposit rates were also reduced; and, To initiate a foreign currency purchasing programme, aimed at decelerating the pace of exchange rate appreciation and creating the premises for a normal trading activity in the domestic foreign currency market. Lowering the policy rate was aimed at further reducing the costs of financing and mitigating appreciation pressures on the exchange rate. The intervention in the domestic foreign exchange market, as a temporary and extraordinary instrument of the monetary policy, was considered as necessary under the conditions when the space for further lowering the policy rate was limited. Interventions in the foreign exchange market were concentrated in the summer months.