BANK OF ALBANIA
PRESS STATEMENT

The Supervisory Council of the Bank of Albania, with a maximum responsibility pursuant to its legal obligations, convened a special meeting on Thursday, 14 August 2014, to discuss the developments at the Bank of Albania since the last meeting.

In this meeting, member of the Supervisory Council, Mrs. Meksi, in compliance with Article 47, paragraph 2 (c) of the Law " On the Bank of Albania", proposed the dismissal of the Governor of the Bank of Albania.  The Supervisory Council of the Bank of Albania (the other five presented members) rejected her proposal. 
  
Also, the Supervisory Council paid a special attention to the analysis of the media announcements and the public statements made by various people related to the theft. 

Related to the above stated, the Supervisory Council reached the following conclusions:

1. Bank of Albania has reacted immediately following awareness of the theft, by pressing criminal charges and making all the documentation and proof requested by the Prosecution available  to this authority. The Bank of Albania continues its close cooperation with the Prosecutor's Office, in order to facilitate the efficient investigation and final closure of this event. This will make clear the responsibilities of each individual charged and will relieve considerably the situation within the Bank.  

2. The Supervisory Council of the Bank of Albania reiterates that it understands the public concern arising from this event and to guarantee the non-repetition of such events in future, having analysed continuously all the elements to determine the circumstances that led to this event. The working groups established to assess administratively the observation of procedures, concluded that neither the Supervisory Council nor the Administrator has committed any legal infringement. The entire legal and regulatory framework in place is comprehensive and guarantees the management of the activity of the Bank of Albania and of the banking system. In particular, the regulatory and procedural framework that deals with the safekeeping, processing and physical security of cash was verified. It was confirmed that continuing with this framework was sufficient to eliminate any legal gap that could lead to misinterpretations or ambiguity related to the individual responsibilities of each employee involved. 

3. In response to the logical question: "then, what went wrong?' the Supervisory Council assesses that it is the human element, who by his/her action or non-reaction facilitated the work of the criminal element to realise the theft. The lesson we learn from the detailed analysis of this ugly act is that, the scrupulous implementation of the regulations and procedures on a daily basis is indispensable. The strengthening of the work discipline for each unit and of each employee is a continuing priority of the daily activity. Only, in this way, practices or behaviours that are a result of routine, familiarisation, monotony and lowering of vigilance will be avoided. 

4. The Supervisory Council of the Bank of Albania highlights that the improvement of the legal, regulatory and procedural framework is an infinite process.  Technology development, for the tracing and prevention of criminal acts, and other factors impose the need for on-going changes, from the regulatory acts to the support of modern monitoring technology. It is due to the technology installed in the premises where cash is kept and processed, that many facts and elements on which the charge of the theft of money at the Bank of Albania by the Prosecutor's Office is based could be concluded. 

5. Thanks to the measures undertaken, it was possible for the Issue Department to continue as normal.  The daily business of supplying liquidity to the system continues as usual, under the conditions of added physical security at the cash processing and supply premises.

6. There have been measures taken to strengthen the requirements related to the employees' background, particularly for key positions at the Bank as well as on-going verification of their background. In compliance with the Code of Ethics of the Bank of Albania's employees, each employee, and particularly the personnel of the Bank of Albania in charge of monetary values, that carries out auditing or supervision of banking system functions, is required to self-declare and issue the respective authorisation to verify in collaboration with specialised public authorities and institutions, the relation they have with behaviours or opinions that contradict the work ethic of the central bank's employee.

7. A review of the regulations, procedures and practices related to the processing and physical safekeeping of cash as well as related to any link of control and inventory chain is being carried out. A guideline has been prepared, where the entire inventory process is clarified and detailed, while in the framework of physical security it is decided to double the observation operators at the electronic monitoring premises.

8. We will continue to be open and inform the Parliament of Albania, the Government, the banking system, business associations and other interest groups related to the developments, impacts and measures that we have in place and that we will continue implementing.  The Supervisory Council once more stated the need to fill as soon as possible the two vacancies, and the appointment of the Second Deputy Governor.

9. There has been an institutional communication with our international partners, providing them with the respective clarifications and to request specialised assistance for many of the elements that are related to operational risk of the activity.  In more concrete terms, we are collaborating with the International Monetary Fund to contract an independent foreign company, which is expert for the cases of fraud and theft in accounting and finance. In communication with the representative of the European Central Bank at the Bank of Albania it is requested to the Central banks of Germany (Deutsche Bundesbank) and the Netherlands (De Nederlandsche Bank) to provide the presence of international experts in the field of cash management and physical keeping. 

10. The Supervisory Council, by rightly understanding the considerable sensitivity that this event has caused, completely acknowledges the concerns of the public.  The activity of the Supervisory Council has been in compliance with the legal provisions laid down in the Law 'On the Bank of Albania". The Supervisory Council concludes that the media or social networks publish also untrue or inaccurate opinions, which threaten the institutional pillars on which Bank of Albania carries out its activity. Independence and professionalism are the two most important pillars of a central bank.  Institutional independence of the Bank of Albania is in complete compliance with the best international practices and also with the non-negotiable request of the European Union integration process. This independence is a core element to protect the central bank from political impact in order to professionally fulfil its mission and tasks. The achievements of the Bank of Albania are available to everyone; they also are made known to and assessed by all our international partners. By considering the activity of the institution, the Supervisory Council brings to the attention of the Albanian public:

• Keeping inflation under control; keeping the value of savings of citizens, and the establishment of the conditions for the development of the financial system during the last 17 years.
• The development of the banking system and the support this system has provided to the economic and financial development of Albania.
• The confrontation of the spillover of the hard financial crisis that surged up in 2008, whose consequences are still now present. 
• The supervision and the taking of continuing measures to guarantee the financial stability of the system.
• The avoidance of public fund injection into banks' balance sheets; this phenomena was dominant during the crisis in many regional countries.

 
At the conclusion of the meeting, the Supervisory Council assures the public opinion that within the independence framework powered by the Constitution and its organic Law, Bank of Albania has all the sufficient capacities to address this event in all its dimensions.

The main priority in these moments is the rapid comprehensive reaction against the consequences of this event, without neglecting the daily care in fulfilling the constitutional and legal objectives of Bank of Albania, particularly price stability, liquidity management, maintenance of the payment systems, supervision and regulation of the banking system.