Competition Authority demands transparency in T-bills market

TIRANA, May 31 – The Competition Authority has recommended the Bank of Albania to take measures in reducing information asymmetries in the treasury bills market because of lack of transparency in informing customers in commercial banks.
Individual or small business customers are not offered necessary information by second tier banks regarding treasury bill market, limiting their choices, said a recently published report by the Competition Authority providing recommendations to increase competition in the primary and secondary market of treasury bills. Information in most banks offering treasury bills covered in the survey was superficial and customers were treated as if they knew the market for years, said the report. The Authority also identified lack of brochures with information on treasury bills.
The Authority says the central bank should issue a regulation for second-tier banks operating in Albania obliging them to provide customers with full and clear data regarding T-bills explaining the benefits of investing in T-bills compared to deposits.
The second-tier banks should also provide information in real time on the T-bill auctions and inform their customers in detail.
Misinformed customers will also be able to benefit compensation in case of missed profit as a result of misinformation by bank employees.
The Authority has also decided to recommend the central bank to return the cash deposits in Tirana and the main five districts where it has braches for participation in the primary T-bill market as an efficient way to eliminate transaction costs from second-tier banks to the Bank of Albania.
The Finance Ministry has also been asked to increase marketing of T-bills in order to have a wider variety of participants in T-bill auctions through advertisements not only in state-owned media.
The Financial Supervisory Authority has also been recommended to increase supervision and transparency in the secondary market preparing reports as it does with the insurance market.
Investment in treasury bills is the most common and most recognized form of investment in securities for Albanian investors.
T-bills are issued and guaranteed by the Ministry of Finance on behalf of the Albanian government. T-bills are traded in the primary and secondary market. The minimum amount to participate in the primary T-bills market is 300,000 lek (3,000 dolllars).
The Bank of Albania organises 3-month and 6-month T-bills auctions every month and 12-Month T-Bills auctions every two weeks.
The year 2009 saw an increase in cases investigated by the Competition Authority under the Law “On protection of competition, said the Authority in its annual report. Key issues reviewed in 2009 by the Competition Authority were related to coordinated practices for price fixing and market sharing agreements, entrance of companies that held dominant market position and of those that abuse this position in particular, market concentration control and evaluation of the legal framework applicable to markets that are monitored or under investigation.