Albania has officially started the legal preparations for the adoption of the euro currency. The new draft law “On the Bank of Albania”, published for consultation, includes for the first time a special chapter that defines how the Albanian central bank will function after the country's entry into the Eurozone. The draft law provides that, from the day of the introduction of the euro as the currency of the Republic of Albania, the euro will become the country's monetary unit, while the Bank of Albania will be responsible for issuing and withdrawing euro banknotes and coins, in accordance with the rules of the European Union and European Central Bank. At the same time, the institution will determine the design of the euro coins that will be issued by Albania, according to European standards.
However, the inclusion of these provisions does not mean that Albania will adopt the euro in the near future. They will enter into force only after the country joins the European Union and meets the economic convergence criteria required for entry into the Eurozone.
The new provisions are part of a broader reform aimed at fully aligning the legal framework of the Bank of Albania with the acquis of the European Union and creating the institutional basis for its integration into the European System of Central Banks.
In addition to the provisions related to the preparation for the adoption of the euro, the draft law introduces a wide reform of the legal framework of the Bank of Albania. One of the main changes is the strengthening of the institutional, functional, financial and personal independence of the central bank, expressly prohibiting it from seeking or receiving instructions from the government or other state institutions.
The draft law sanctions as a primary objective the preservation of price stability, while it gives the Bank of Albania a clearer mandate for the preservation of financial stability. For the first time, the law includes a special chapter on macroprudential policy, giving the bank broader powers to identify and limit systemic risk in the financial sector.
The reform also expands the Bank's powers in the supervision of financial institutions, giving it the right to conduct more thorough inspections, request additional information and impose administrative measures on supervised entities. At the same time, the legal framework for payment systems, the administration of foreign exchange reserves and the collection of monetary and financial statistics is strengthened, in accordance with the standards of the European Union.
The draft law also foresees changes in the governance of the Bank of Albania, strengthening the professional and integrity criteria for its leaders, as well as creating the Monetary Policy Committee and the Financial Stability Committee as advisory bodies for the Supervisory Council.
Another innovation is the strengthening of the financial independence of the Bank of Albania. The draft law increases the subscribed capital from 2.5 billion to 6 billion ALL, while defining a new recapitalization mechanism for cases where the capital falls below the minimum level. In addition, the requirement that the general reserve be at least five times greater than the subscribed capital is maintained and special reserves are created to cover financial risks./scantv
