EBRD offers 100 mln euro to Albania to make bank deposits safer

EBRD offers 100 mln euro to Albania to make bank deposits safer

A guarantee has been added to the deposits that all Albanians have in the banks of the country.

The deposits will now be safer than before, thanks to a 100 million euro loan that the European Bank for Reconstruction and Development has awarded the Deposit Insurance Agency.

This loan guarantees to the Agency the necessary funds to turn the level of 3.7% of the coverage of insured deposits in the banking system, at 6%.

The draft was presented to the Parliamentary Commission of Economy by the Deputy Finance Minister Erion Luci.

"It is a very useful line of credit, especially in situations where it is necessary to pay depositors, since it is a strong foreign currency, such as the Euro, and it also decreased the support that the Deposit Insurance Agency will boast from the Ministry of Finance. With this line of credit the coverage is increased by three percent points, sending it currently above 6 percent, which exceeds the level that is recommended for the region, at 5 percent. The total amount is around 100 million euro, which pretty improves the coverage of banks by the Deposit Insurance Agency," Deputy Minister of Finance Erion Luci said.

The credit line decreases the possibility of using funds from the state budget.

The credit line provides liquidity in a short time (7 days) to respond to depositors in the case of an insurance event.

The rapid compensation of depositors is of a particular importance in preventing isolated insurance events from spreading their effects throughout the financial sector by affecting thus the financial viability of the country.

The draft was voted by all the members of the Parliamentary Commission of Economy.