Banking services market in Albania - Challenges and opportunities

• Author: Brikena Sulejmani
• Position: University 'Ismail Qemali' Vlore, Faculty of Economy, Department of Finance
• Pages: 195-200

195

Vol. 4 No.2

September 2018

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

Banking services market in Albania – Challenges and opportunities

Brikena Sulejmani

University “Ismail Qemali” Vlore

Faculty of Economy, Department of Finance

Abstract

Banking sector is the main pillar of the fi nancial systemin Albania and an important factor.

The aim of this paper is to present the change course of monetary policy applied by banks in

Albania at di erent time periods, the role that it has played in the preservation of the domestic

currency, how it has been used to overcome crisis moments the banking system faced over

time, and the challenges it faces today. An historical review of the development of banking

system from 1850 till nowadays is given, underling specifi c characteristics for each period.

This paper also tries to present some of the future challenges and opportunities banking

system is going to face during European integration of Albania.

Keywords: banking system, fi nancial system, monetary policy.

1. Literature review - Historical data regarding the development of the

Albanian banking system

Albanian fi nancial system is dominated by thebanking sector which comprises the

largest share of the system.

1.1. First period, from 1850 to 1913

Referring to the literature review, the fi rst bank in Albania dates back to 1850, in

Vlora. According to “The BankersAlmanac And Book Year” for 1935 -36, The Ninety-

First Year of Publication, page 716, there is a list of four banks11:

- Private banks Philadelphia USA 1764;

- Private banks Bohatka 1850 (Valona, Albania);

- Romanian Bank 1872;

- Birmingham Bank USA in 1887.

These historical facts show that the bank of Vlora was the second a er that of

Philadelphia, USA.

These were the fi rst a empts for banking operations which at the moment were

limited at payment services and also brought the creation of the currency. Those were

followed by establishment of the second bank in Albania, Imperial O oman Bank,

which were established on

4 February 1863 and the new service was that of issuing bank notes convertible into

gold. This bank established its branches in all O oman Imperial of the time, like that

of Ioannina, Bitola, Skopje and another Albanian city, Shkodra.

38 years later, in 1888, the O oman Empire, establish the fi rst Agricultural Bank

of Albania, which has its branches, by expanding its activity in di erent cities of

Albania, Berat, Elbasan Kavaje, Korce, Shkoder. This bank will be remembered as

the fi rst bank which provided the most long term return loan to the Albanian farmers,

since in 1912, gave to them 6.7 million gold loan.

1.2. Second period,from 1913 to 1944

The Central Bank of Albania (CBA), the fi rst central bank institution in Albania, was