Non-banking sector shrinks in H1

TIRANA, Dec. 5 – Albania’s non-banking financial sector, dominated by micro-credit financial institutions and insurance companies shrank to 5.5 percent of the total financial system at the end of the first half of 2011, compared to 5.7 percent at the end of 2010. The data are made available in the latest Bank of Albania report on financial stability report for the first half of 2011. The non-banking financial sector, composed of financial institutions supervised by the central bank and the Financial Supervisory Authority, represented 4.78 percent of the GDP at the end of June 2011 compared to 4.9 percent in December 2010.
The sector is dominated by non-banking financial institutions whose assets account for 2.97 percent of the total, followed by insurance companies at 1.65 percent, credit-saving unions, at 0.87 percent and the private pension funds at their initial stages representing only 0.01 percent of the GDP.
In its latest report the European Commission concludes that there remains insufficient administrative capacity in the non-banking financial sector to enforce market surveillance and proper implementation of legislation. “Further efforts are needed with regard to the securities markets. Investment services legislation and infrastructure are at an early stage. Overall, preparations are moderately advanced.”