Eurozone regulatory measures are hampering lending in Albania: BoA’s Sejko

Regulatory austerity measures on the euro zone banking groups are among factors that are hindering the growth of lending in Albania.

The Governor of the Bank of Albania Gent Sejko said during a conference organized in cooperation with the International Monetary Fund that the new banking regulation in the euro zone, in the short term, represents a challenge for the banking systems of the Western Balkan countries.

Coefficients of high risk for investments in these markets have prompted banks of the euro zone groups operating in our region to restrain lending.

The conference that is taking place in Tirana centered on the effect of Eurozone negative interest rates in the policies of central banks of the Western Balkans.

Governor Sejko said that negative interest rates in the Eurozone have brought benefits in the region, as long as they have prevented deflation and have favored capital inflows through foreign investment.

However, negative interest rates have also posed serious challenges related with dilemmas of defining a lower limit of the base rate or liquidity management by central banks and commercial banks of the region.

The conference that started on Thursday will provide an opportunity for policy makers and senior representatives from the central banks of the Western Balkan countries to exchange views on the challenges related to monetary policy, financial stability and foreign exchange reserve management.

SCAN

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