In the case of Albania, as in many other developing countries, remittances enter the country by either formal or informal means. The most recent surveys show that only 22.6 percent of emigrants prefer to use official means, whereas 77.4 percent turn to unofficial channels – in most cases by themselves. The official network includes the commercial banks and money transfer companies, the activity of which is regulated and supervised by BoA. Money transfer companies (Western Union and Money Gram) have played a significant role in transferring remittances from the beginning of their activity in the 90s. Their wide geographical extension throughout the country covering also many rural areas has complemented adequately the rather slow expansion of the banking sector in facilitating money transfers. Lately, the official network has gained considerable grounds over the informal ways in terms of total transfers carried out. The volume of remittances channelled via official means in 2004 is estimated to have been around 46 percent of the total, as opposed to just 12 percent - the average for the period 1994-1996. It seems the official network has earned Albanian emigrants’ trust for transferring their money. The development of the financial system in Albania it’s a key factor in explaining the movement of transfers toward official means. Thus, only during 2004, there have been 30 new branches and banking agencies opened throughout the country. Nevertheless, the unofficial flows remain still high, accounting for more than half of the total volume.
We understand that the task of strengthening and enhancing the financial stability of banks cannot be single-handedly managed by the Bank of Russia alone. It is important to place more responsibility for misconduct on the owners and managers of credit organisations themselves, to ensure the irreversibility of punishments for crimes. Qualitative changes are in store for the banking industry – these include a transition to a three-tier banking system, comprised of systemically important banks, banks with universal licences, and banks with basic licences. This is a radical change in the banking system, which we will need to implement with care in the near future. The three main tasks set before us, which we are currently resolving, are: to better manage risk, so as to protect the rights of depositors and creditors; to promote the availability of credit, including credit for small businesses; and to ensure fair competition, wherein a bank of any type will be able to work and earn within their niche in the market. Another pressing task is the implementation of a new resolution mechanism. We hope that it will be in place by autumn, when we will be ready to use it. This will allow us both to reduce the cost and to speed up the resolution mechanism, in order to make rehabilitated banks more attractive to investors. In the banking sector, as well as in the financial sector overall, the challenge lies not only in rehabilitating and cleaning up, but also in creating the conditions for development.