05 Spi Albania Project Liquidity Cb Draft Questionnaire

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SPI Project: “Enhancing Banks’ Liquidity Risk Management”

Cost and Benefit Questionnaire on Impact on the banking system of the new Liquidity Risk Management Framework

Prepared by

SPI Albania Secretariat
Contact persons: Ms.Endrita Xhaferaj, Director, Financial Modernization Program and Analytics endrita.xhaferaj@spi-albania.eu Mrs. Anuela Ristani, Director of Operations, anuela.ristani@spi-albania.eu Address: Twin Tower I, Kati 6, Apt. A3. Tel. +355 42 280 359; Fax. + 355 42 280 371

I.

Context

Bank of Albania is seeking to enhance banks’ liquidity risk management by reviewing the regulatory framework according to international guidelines and best practice. The actual regulatory framework provides only principles for the liquidity management, and banks have independence in managing the liquidity level based only on principles set by the BoA, with no quantitative prudential ratios (thresholds). The financial crisis that originated in USA in 2008 and the tight conditions on liquidity in the international markets are factors that might influence the activity of the banking system in Albania as well. During year 2008, the Basel Committee and the Committee of European Banking Supervisors both released revised principles and recommendations containing new regulatory requirements for the management of liquidity risk, i.e. Principles for Sound Liquidity Risk Management and Supervision (by the Basel Committee) and Second Part of CEBS's Technical Advice to the European Commission on Liquidity Risk Management (by the CEBS). The principles emphasizes the importance of supervisors assessing the adequacy of a bank's liquidity risk management framework and its level of liquidity, and suggests steps that supervisors should take if these are deemed inadequate. The Albanian regulatory framework should also be aligned to the revised Basel Committee guidelines. SPI Albania, with the authorization of SPI Committee, has undertaken e project on the revision of the Liquidity Risk Management regulatory framework with the following objective: To enhance banks’ liquidity risk management by reviewing the current regulatory framework according to international guidelines and best practice, including introduction of quantitative prudential ratios, in order to prevent the occurrence of systemic liquidity difficulties. PWG composition

Project Owner: Project Manager: Deputy Project Manager: Technical Anchor (TAN):

Mr. Indrit Bank, Supervision Department, Bank of Albania. Mrs. Miranda Ramaj, Supervision Department, Bank of Albania. Ms. Enkelejda Bargjo, Market and Liquidity Risk, Tirana Bank One pier reviewer from Central Banks in the region

Project Working Group Members: Donata Totokoci / Persefoni Papa, ProCredit Bank Artiola Agalliu, Alpha Bank-Albania Altin Sholla, Bis Banca Christian Canacaris / Rigels Kristo, RBAL Altin Koci, ICB 2

Jola Dima, Intesa Sanpaolo Bank Eralda Gurga / Gresa Panajoti, Emporiki Miranda Kacani, BKT Elvira Jaze / Admir Ramadani, First Investment Bank Erjon Tace, Banka Popullore

II. Purpose of the banking survey
We are seeking through this survey to get your validation on the qualitative costbenefit analysis, to assess the readiness to implement a new regulatory framework on Liquidity Risk Management, and the impact of the new quantitative requirements for liquidity indicators.

III. Procedures to run the banking survey
You are kindly requested to support the Liquidity Risk Management framework revision processes by answering this questionnaire. Please send your answers to SPI Secretariat who stands ready to offer you more details. Your answers will be treated in strict confidentiality. The results of the banking survey will be disclosed only at aggregate level Please send your answers by xx.xx.2009. For eventual further clarification needs, please indicate below the contacts of the person who completed the questionnaire: Name…………… Position…………………. Bank………………………. Email address:……………….....
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