December 04 2009
The new Regulation on the Core Management Principles of Banks and Branches of Foreign Banks and the Criteria on the Approval of their Administrators entered into force on July 10 2009.
The regulation sets out, among other things:
The regulation enables banks (without the prior approval of the Bank of Albania) to contract and enter into agreements with third parties in the area of telephone and market information services, such as those provided by, among others, Bloomberg, Moody's and Standard & Poor's, and common infrastructure networks, such as Visa and MasterCard. A bank may outsource the following without the prior approval of the Bank of Albania:
Given the financial crisis and the greater emphasis on liquidity management, the Bank of Albania has provided new competencies for the Steering Council and the directorate. Their key function is to ensure that banks and foreign branches have adequately robust internal organizational structures to manage liquidity risk. They must be familiar with the risk profile and ensure that banks' capital levels sufficiently cover any risk.
The council has a supervisory role and the directorate has a more hands-on, daily management role. The council reviews and assesses:
The directorate shall, among other things, organize and continuously manage a bank's activity.
Changes brought about by the regulation in relation to administrators focus mainly on the criteria for their appointment. For example, the evaluation procedure for the appointment of a foreign citizen as an administrator shall now take place in two stages. During the first stage the Bank of Albania evaluates the documentation submitted and, if such documents prove that the criteria have been met, shall grant its initial approval. During the second stage the Bank of Albania grants final approval once the relevant work and residence permits have been produced.
For further information on this topic please contact Irsida Gjino at Kalo & Associates Law Firm by telephone (+355 4 2233 532), fax (+355 4 2224 727) or email (email@example.com).
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