Ardian Fullani: Past and future banking reforms in Albania and the region Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at The Fifth International Banking Forum, Athens, Greece, 6 December 2006. *  *  *  Honorable Dr. Margret Doyle, Dear Mr. Chairman, Distinguished participants, Before starting my speech I would like to briefly address the perennial question that stands at the heart of our quest: “Are the prosperous times ahead of us?” It comes to my assistance an old saying of one of your ancient philosophers, Eupides: “Prosperity is full of friends”. As we are gathered here as friends, I believe we have a positive answer to this question. I would like to thank “The Economist Conferences” for inviting the Bank of Albania in this very important forum. It is a great pleasure to be here today. The topic of my speech will be economic reforms. I will take this opportunity to express my views on past and future banking and financial reforms in Albania and the region. The topic is not new of course. However, reforms and their implementation are a dynamic process that must reflect changes and expectations for future developments in both domestic and global markets. Therefore, it will always be an open discussion in need for new ideas and solutions. Central banks are important contributors to the economic reforms and their implementation. They not only welcome and support but also generate reforms in the capital, labor, and product markets.
Currently, the activities of financial institutions and commercial banks have a limited scope; however, we are starting to see the signs of financial conglomeration. We have no doubt that this trend will grow and continue in the future. It will bring innovation, new financial instruments and products in the market. Along with this, rapid growth of credit and debit cards as well as other systems of payments will continue to grow. While these instruments might not subside or even reduce the use of cash, this trend must be taken into account. Transition economies of the region are lucrative markets. They are growing substantially faster than traditional European markets and offer impressive prospects for high profits and significant growth. To give you an example, return on banking activity in Albania during the last two years has been around 20 percent. These positive prospects and the eagerness to compete quickly and beyond rational limits for profits and market share may create potential risks. If managers were to lose sight of the entire picture, and financial constrains, such competition might result in mismanagement, nonperforming loans, and other banking problems. Therefore, there is no room for sloppy managerial attitude. It is very important that managerial staff must be up to the challenges which, if materialized, could be more complex than in the self-regulated developed markets. It is important to act enbloc and engage in regional projects of infrastructure including here the financial ones.