Other sectors of the country's financial system are not large enough to be systematically important. How ever, growth in the insurance sector is rapid and the fear is that problems within this sector may undermine confidence in the institutions (Ingves and Dappler, 2005).
The Bank of Albania (BOA) is at the hem of the financial system, setting the rules, ensuring fair play. It is the keeper of the government accounts, carry out and negotiate government lending and borrowings. It also monitors the other institutions (Commercial banks and other forms of depository institution.) It issues and revokes licenses and do not compete with other institutions in ordinary business operations, but uses its lender of last resort policy, and open market operations to bail the economy and other banks out of recession (Article 16 of Law No.7491, dated April 29, 1991).
Other institutions include, state banks, banks limited by shares, cooperative banks and private banks with Albanian capital exclusively. Private or state banks with Albanian and foreign capital, and private banks with foreign capital. Membership deposits and credit are open to both physical and legal persons. There are about sixteen commercial banks in Albania, and examples of such institutions include: Alpha Bank, Procredit Bank Italian Albania bank.
The ownership and management structure runs from the general assembly, through the board of directors, the managing director to the front line employees. The internal and external audits are independent bodies to ensure, agents greed are mitigated. However, these institutions can only go operational once required conditions set by BAO are met, from capital to qualified board of directors.
Other forms of non banking crediting institutions include
The Mountain area Financing Fund (PSHM).
Future Development Association (FDA).
Albania savings and credit union
However, Ingves and Dappler, 2005 argued that this non banking sector is not large enough to be systematically important their roles and contributions should not be under looked as most of them provide alternative banking services to deprived areas.
What is the role of the central bank'
A Central Bank (CB) is the central authority, the rule maker and the government representative in the financial system. It is an entity responsible for the monetary policy of its country or of a group of member states (http://en.wikipedia.org/wiki/Central_bank). "It is a bank that provides financial and banking services for the government of a country and its commercial banking system as well as implementing the government monetary policies" (Butler B. etal 1997:58). In Albania, the central bank is known as The Bank of Albania or in other words, the banker's bank. Other examples of central banking institutions include The Bank of England for the United Kingdom, the Deutsche Bundesbank in Germany, and France's Banque de