Albanian Government increases deposit guarantee

TIRANA, March 14 – The Albanian Government decided to increase its guarantee for bank deposits from 700,000 leke to 25,000 Euros in an effort to help build confidence in the banking system.
The guarantee is an effort to assure domestic savers and more than one million Albanian immigrants that their deposits would be safer at home than their countries of residence.
“The positive trend of savings growth in the country’s banks in the last two months encouraged the government, along with the banks, to raise the full guarantee for the citizens’ savings up to 25,000 Euros,” Berisha told a government meeting. “Here they will find a safe shelter for their money.”
Financial authorities in the country and international institutions have warned there will be a reduction of the immigrants’ remittances, which have been 13-14 percent of the GDP, or about 1 billion Euros, due to the global financial crisis.
The Albanian government insists that it has not been affected by the global crisis though it has now acknowledged to suffering some consequences like the fall of remittances and lowered trade exchange.
Berisha said the move would cover 80 percent of all deposits in Albanian banks.
According to the Central Bank of Albania the total amount of deposits dropped from 668 billion leke (5.096 billion Euros) in September to 641 billion leke (4.895 billion Euros) in October to 627 billion leke (4.787 billion Euros) in November and 620 billion leke (4.731 billion Euros) in December. The Bank also added that banks in Albania, mostly foreign-owned, had not invested in toxic instruments, and they remain profitable, liquid and well-capitalized.
Albania’s agency to guarantee deposits up to the equivalent of 5,000 Euros opened in 2001.