BoA drafting EU-based self-assessment to prevent large banking groups from leaving

One of the reasons why European banking groups have left the markets of Eastern Europe in recent years is tighter banking regulations.

The European Banking Authority has decided several years ago that all banks’ assets outside the EU should be classified with 100% risk coefficients in the calculation of capital needs of the groups.

The cost of keeping these branches, in terms of necessary capitalization, has increased, and as a result a number of banks have decided to leave the countries of the region, including Albania.

The reduction of risk coefficients for investments outside the EU is not expected to materialize until the Banking Authority has assessed the oversight equivalence of each country according to the framework that is applied within the European Union.

This is a long due process and it has already started with the largest markets outside the Eurozone.

Until the European Banking Authority takes into consideration the Western Balkan countries, such as Albania, other banking groups are slated to leave the area.

For this reason, Bank of Albania, together with its counterparts in the region, has requested that the assessment of supervisory equivalence may be done by one of the four major global auditing companies: Deloitte, Ernst & Young, Pricewaterhouse Coopers and KPMG.

This would enable countries outside the EU to receive the assessment faster as well as to gain time, with a view to keeping and, eventually, attracting investors in the banking sector.

Meanwhile, while preparing for this process, BoA has stated that it make a self-assessment of the oversight equivalence in order to test whether it can achieving this objective.

SCAN

*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.