The Financial Supervisory Authority presented its annual activity report for 2018 on Monday to the Parliamentary Committee on Economy and Finance.

Executive Director Ervin Koçi underlined the positive developments in the financial markets, one of which was the launch of the Albanian Securities Exchange, ALSE operations, the first functional exchange in the country’s history. Since February last year, ALSE enables trading of bills and bonds of Albanian government, while this year is expected to start trading of securities of private companies.

Last year, AFSA presented the 5-year strategy of market development, where an important target is the expansion of the financial market. According to the FSA, the strategy aims to promote the development of a competitive and efficient market, enabling the creation of innovative products and increasing public confidence.

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Albanian’s Parliament voted today on April 3rd, 2019, during the hearing sessions, the draft “For the appointment of Albanian Financial Supervisory Authority’s new Board member”. The new Board member of AFSA was appointed Mr. Deniz Deralla, as proposal coming from the Supervisory Board of Bank of Albania.

Mr. Deralla is the director of Supervision Department of Bank at Albania. During the previous day, he held a hearing session at the Parliamentary Commission of Economy and Finance.

Albanian Financial Supervisory Authority makes available for public consultation the draft law: “On Capital Markets” and the draft law “Collective Investment Undertakings”.

These draft laws reflects the best European practices and are based on the legislation and EU standards, actually MiFID II directive, UCITS and AIFM directives. Drafting of these draft laws supports the objective of granting EU membership for Albania.

These draft laws are prepared as part of the Project “Strengthening of the Albanian Financial Supervisory Authorities’ supervising capacities: Focus on Development of Capital Market”, financed from Swiss State Secretariat for Economic Affairs (SECO) and supported from World Bank.

FDI into Albania rises 9.1% in 2018Albania flag

TIRANA (Albania), March 25 (SeeNews) – The inflow of foreign direct investments (FDI) in Albania increased to 981.6 million euro ($1.1 billion) in 2018, as compared to 899.9 million euro in 2017, according to central bank data published on Monday.

On a quarterly comparison basis, the net inflow of foreign direct investment also increased – to 263.8 million euro in the fourth quarter of 2018, from 221.0 million euro in the July-September period, the central bank said in a report.

The biggest volume of foreign investment in Albania in the fourth quarter, of 80.2 million euro, originated in Switzerland, followed by France with 43.7 million euro.

The sectors, which attracted the biggest volume of investment by non-residents in the October-December period of 2018 were electricity, gas, and water supply with 80.7 million euro and mining and quarrying with 57.8 million euro.

Currently, Albania’s economy is fed by two big energy projects – the construction of the Trans-Adriatic Pipeline (TAP) and works on a hydropower plant along the Devoll river.

Source: SeeNews

Foreign remittances to Albania rise 5.3% y/y in 2018Bragin Alexey/Shutterstock.com

TIRANA (Albania), March 25 (SeeNews) – Foreign remittances to Albania increased to 669.6 million euro ($756.5 million) in 2018 from 635.7 million euro in the previous year, the central bank said on Monday

The flow of foreign remittances into Albania decreased by 1.7% year-on-year in the fourth quarter of 2018, reaching 169.2 million euro, Bank of Albania said in a quarterly balance of payments report.

Money sent by Albanian citizens living abroad edged down 0.5% in the October-December period as compared to the previous quarter.

Source: SeeNews

Within this year, the terms of reference for setting up a national payment system in euros will be drafted.

Meanwhile, the establishment of the respective infrastructure will be realized during 2020. The Bank of Albania has included this objective in the mid-term development strategy 2019-2021. Settlement of Euro banknotes to customers of commercial banks in Albanian territory is a project proposed by the Albanian Association of Banks and approved in principle by the Bank of Albania since last year.

Currently, Albania has no payment systems in foreign currencies and foreign currency transfers are carried out through correspondent banks outside Albania. This brings much higher commissions compared to ALL transfers, which are processed through national payment systems. Under the project, the euro payment system will be managed by the central bank. Banks are obliged to hold a mandatory reserve at the Bank of Albania.

In the required reserve account, banks will set a surplus that will be used to make transfers from one bank to another. Thus, if a customer performs a transfer from bank A to bank B, both within Albania, then the transfer of funds will be made between the accounts each bank holds in the central bank. Subsequently, the receiving bank will transfer this money from its mandatory reserve account to the beneficiary’s account. This scheme will avoid the involvement of foreign correspondent banks and will drastically reduce the cost of the transfer.

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Private pension schemes are taking considerable proportions. The year 2018 was a further confirmation of this positive trend. According to data from the Financial Supervisory Authority, the number of contributors to private pension funds has reached more than 25 thousand. Over the past year, the number of contributors was increased by about 4300 individuals or 21%.

The increase in the number of members is led mainly by the Credins Pension fund, which now counts more than 15 thousand contributors and holds over 60% of the market. Even in cooperation with the parent company, Credins Bank, this fund is successfully promoting the importance of investing in a private pension. The growth of private pension schemes would have a very important social and economic impact over the long term. The growth of these funds will reduce the pressure on the state social security scheme.

However, incentives to increase these funds are still insufficient. By law, these contributions are exempt from personal income tax to the extent of 15% of gross annual income, but not more than ALL 200 thousand per year. The Financial Supervisory Authority has been demanding from the government for years to increase fiscal incentives, but so far, without success.

In volume, the market remains modest but with steady growth year-on-year. The total assets of pension funds at the end of December reached ALL 2.3 billion, up 32% over 2018.

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Private pension schemes are taking considerable proportions. The year 2018 was a further confirmation of this positive trend. According to data from the Financial Supervisory Authority, the number of contributors to private pension funds has reached more than 25 thousand. Over the past year, the number of contributors was increased by about 4300 individuals or 21%.

The increase in the number of members is led mainly by the Credins Pension fund, which now counts more than 15 thousand contributors and holds over 60% of the market. Even in cooperation with the parent company, Credins Bank, this fund is successfully promoting the importance of investing in a private pension. The growth of private pension schemes would have a very important social and economic impact over the long term. The growth of these funds will reduce the pressure on the state social security scheme.

However, incentives to increase these funds are still insufficient. By law, these contributions are exempt from personal income tax to the extent of 15% of gross annual income, but not more than ALL 200 thousand per year. The Financial Supervisory Authority has been demanding from the government for years to increase fiscal incentives, but so far, without success.

In volume, the market remains modest but with steady growth year-on-year. The total assets of pension funds at the end of December reached ALL 2.3 billion, up 32% over 2018.

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