Wednesday, November 9, 2011

Albania to Protect its Banks from the Greek Crisis

A new bill presented in Albania’s parliament aims to force foreign banks to transform their branches into local subsidiaries.

Besar Likmeta
Albania's Central Bank

The draft law, which is expected to pass through Albania’s parliament this week, is targeted at Greek banks which own a sizable share of the local market.

By transforming branches of local banks into subsidiaries, Albania is attempting to protect local depositors from a possible default of the mother financial institution.

Foreign companies currently control 95 per cent of Albania’s banking market. Austria's Raiffeisen, Italy's Intesa Sanpaolo, Greece's Alpha Bank, France's Societe Generale and the National Bank of Greece, NBG, are among the largest. Only Credins bank is owned by a consortium of local investors.

Greek banks like Alpha and NBG, whose local branches in Albania currently control 23 per cent of the banking sector, are facing increase difficulties at home, as the public debt saga in Greece continues.

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