CHALLENGES OF THE DEVELOPMENT OF THE FINANCIAL SYSTEM IN ALBANIA

Abstract

This article aims to present an overview of the financial system in Albania, emphasizing the current reality, the progress achieved and the challenges that still need to be addressed. After the period of communism, Albania has experienced a long road towards the modernization and development of the financial system. The transformation from a planned economy to a market economy has brought significant changes in the structure and operation of the financial system in the country. Thus, over the years, the financial system has had a stable and ever-increasing development, both from an architectural and institutional point of view, as well as from a legal and regulatory point of view. While the non-banking sector has its early beginnings quite modest, since 1996 with the creation of the state stock exchange (Tirana Stock Exchange), which was never included in the privatization process, keeping the capital market in a stagnant phase. Also, the liberalization of the insurance market began only after 1998, while the first stages of the development of collective savings and investment schemes (pension and investment funds) began to be created after 2012. In recent years, Albania has made considerable progress in the financial sector and has taken important steps towards modernization and harmonization with international standards. This article will examine the development of the financial system in Albania over the years, focusing on the progress and challenges it faces.