National bank of Albania

Bank of Albania
Company type	Central bank
Industry	Banking, Financial services
Founded	1925
Headquarters	Tirana, Albania
Area served	Albania
Products	National currency issuance, monetary policy, banking supervision

Adapted from the English Wikipedia article National bank of Albania, available under CC BY-SA 4.0Updated 11 August 2025

The Bank of Albania () serves as the central bank of Albania, responsible for issuing the national currency, the Albanian lek. Its main office is located in Tirana, and it maintains five regional branches in Shkodër, Elbasan, Gjirokastër, Korçë, and Lushnjë. Additionally, it operates a Research and Training Center situated in Berat.

Originally established in 1925 in Rome under the name National Bank of Albania (, , abbreviated BKS or BKSH), this institution was succeeded in 1945 by the government-controlled Albanian State Bank headquartered in Tirana (, known as BSS or BSHSH). The current designation, Bank of Albania, was adopted in 1992.

Background

After Albania declared independence on 28 December 1912, the nation lacked a central banking authority despite multiple efforts to create one.

During the administration of Ismail Qemali, an initial "National Bank of Albania" was formed on , heavily influenced by foreign financial entities such as Austria's Wiener Bankverein and Italy's Banca Commerciale Italiana. This foreign dominance incited an uprising in May 1914 against the regime nominally led by Wilhelm von Wied and effectively controlled by the strongman Essad Toptani. The banking endeavor lasted only a few months before ceasing operations.

Throughout World War I, Albania endured monetary instability under various foreign occupations. By the early 1920s, foreign currencies prevailed in economic exchanges, causing significant disruption. In 1923, some municipalities issued their own banknotes to address this issue. A League of Nations initiative proposed establishing a central bank with majority ownership by European governments, leaving Albania with a minority stake of just 10%.

National Bank

Following the establishment of the Albanian Republic and Ahmed Zogu’s consolidation of power, an agreement was reached on between Albanian officials and Italy’s Credito Italiano, led by Mario Alberti, to create the National Bank of Albania headquartered in Rome. This accord was ratified on , and the bank officially commenced operations on .

The initial capital amounted to 12.5 million gold francs, designed to be equally shared between Albanian and foreign investors; however, Italian stakeholders ultimately held majority control due to limited Albanian participation. All 100,000 founders’ shares were Italian-owned, predominantly by Credito Italiano. Meanwhile, 495,000 common shares were distributed among various investors including Eqrem Vlora (11.7%), Nexhat Pasha Vlora (10.5%), Basler Handelsbank (10.1%), a Yugoslav consortium (10.1%), along with other Italian financial institutions.

Despite its title, the National Bank of Albania functioned autonomously from Albanian governmental control. Its headquarters remained in Rome under Italian leadership figures like economist Amedeo Gambino. Its organizational structure resembled that of institutions such as the State Bank of Morocco, with central operations and board meetings conducted in Rome where Albania’s gold reserves were also stored. This foreign control provoked political opposition that Ahmed Zogu exploited to sideline adversaries including Foreign Minister Mufid Libohova.

The bank’s Roman premises were located on Piazza dell'Esedra, close to the Bank of Italy. Within Albania, branches were established in Durrës (1925), Shkodër (1926), and Vlorë (1926), followed later by offices in Berat, Elbasan, Korçë, and Sarandë.

During the period of the Italian protectorate of Albania (1939–1943), the National Bank encountered competition from institutions like Banco di Napoli and Banca Nazionale del Lavoro. It expanded its network with a branch in annexed Prizren but refrained from pursuing growth into Montenegro. The volume of currency issued rose dramatically from 11.1 million francs in 1937 to 108.4 million francs by 1941, indicative of inflationary policies.

When the German occupation of Albania began in September 1943, bank operations persisted despite challenging circumstances, including the coerced relocation of gold reserves from Rome to Berlin.

State Bank

Following Albania's liberation from German forces in late 1944, the Albanian operations of the National Bank were nationalized on 13 January 1945 and subsequently renamed the Albanian State Bank. The Italian legal entity of the National Bank was dissolved in 1957. Initially, the State Bank functioned within a rigid monobank system, establishing an internal division for retail savings in 1949, which was later rebranded as the Institute of Saving Accounts and Insurance, yet remained a component of the State Bank. On , an Agricultural Bank was created as a distinct entity but continued to operate under the unified banking framework.

Bank of Albania

After the fall of communism in Albania in December 1990, reforms targeting the financial sector were initiated. The Albanian Commercial Bank (, BTSH) was founded on as a spin-off from the State Bank's commercial operations, taking charge of branches located outside Tirana. Subsequently, on , BTSH merged with another spin-off, the Albanian National Bank (, BKSH, established in 1992), leading to the creation of Banka Kombëtare Tregtare (BKT, National Commercial Bank). This institution was privatized in 2000 and later came under the ownership of Çalık Holding.

The Institute of Saving Accounts and Insurance underwent a name change to Savings Bank and was spun off in 1991; it was privatized in 2004 as Raiffeisen Bank Albania ().

In 1992, the State Bank adopted the name Bank of Albania, dedicating itself to its central banking responsibilities within the newly implemented two-tier banking system.

An agreement reached in 1996 enabled the return of most of the former National Bank's gold reserves back to Albania.

Operations

The bank’s central mission is to uphold price stability while fostering development in foreign exchange policies, domestic financial markets, and payment infrastructures. It also plays a role in enhancing monetary and credit conditions.

As the overseer of national currency management, the Bank carefully balances currency issuance and credit availability to avoid inflationary pressures or economic slowdown, aiming to encourage economic expansion through stable prices.

Acting as fiscal agent for the Albanian Government, the Bank manages extensive financial services involving billions of Albanian Leks. The government holds an open account with the bank for conducting domestic and international transactions; nonetheless, Treasury revenues and expenditures are processed via commercial banks.

Monetary policy

The Bank of Albania possesses exclusive authority over monetary policy in Albania, with its primary goal being to achieve and sustain price stability. Its approach is grounded in legal frameworks, economic models forecasting inflation trends, and a suite of monetary tools aligned with operational objectives. The inflation target is set at an annual rate of 3.0%, with an allowable deviation of plus or minus one percentage point; inflation was recorded at 1.7% during the third quarter of 2014.

To execute its policy, the Bank engages in open market operations by purchasing or selling securities to regulate short-term liquidity and stabilize interest rates within financial markets. Standing facilities provide banks with unlimited access to overnight liquidity instruments that influence fluctuations in money market interest rates. The minimum reserve requirement is currently fixed at 10%, serving to control liquidity within the banking system and stabilize interest rates. Banks are required to maintain reserves based on their reserve base, which includes liabilities denominated both in Lek and foreign currencies, with an averaging mechanism allowing up to 40% flexibility throughout the maintenance period. Reserves held in Albanian currency receive interest linked to the base rate, whereas foreign currency reserves are remunerated according to rates set by institutions such as the European Central Bank and Federal Reserve.

Banking Oversight

The Bank of Albania is responsible for regulating and supervising all banking operations within the nation, managing the authorization, licensing, and continuous regulatory compliance of banks and financial entities. Its supervisory role focuses on ensuring the stability of the banking sector, safeguarding depositors' interests, promoting transparency, and enhancing investor trust, all while encouraging sustainable growth and profitability in the industry.

The primary supervision goals include:

Granting licenses exclusively to owners and management who are qualified, meet legal, ethical, and professional criteria, hold sufficient capital proportional to risk exposure, and implement robust risk management frameworks;
Guaranteeing that banks function prudently under applicable laws and regulations, maintain adequate capital and liquidity levels, preserve asset quality, adhere to global best practices, and conduct their operations responsibly;
Addressing banking challenges swiftly to protect depositor funds and reduce potential public financial burdens.

To fulfill these objectives, the Bank of Albania:

Crafts and revises regulations concerning market entry, prudential rules, receivership processes, and enforcement mechanisms;
Applies risk-oriented supervisory methodologies and frameworks;
Sets procedures and benchmarks consistent with international standards;
Ensures uniform execution of supervisory activities;
Maintains a skilled workforce capable of effectively overseeing the financial sector;
Collaborates regularly with key industry participants and regulatory bodies on mutual issues.

Presidents of the National Bank of Albania

, 2 September 1925 – 25 March 1931
Giuseppe Bianchini, 25 March 1931 – 25 March 1935
Antonio Mosconi, 25 March 1935 – 8 September 1943

Directors-General of the Albanian State Bank

Kostandin Boshnjaku, 17 January 1945 – 2 April 1946
Abdyl Këllezi, 1946 – 1948
, 1948 – 1966
Zeqir Lika, 1 April 1966 – 15 February 1974
Llazar Gjika, 2 February 1974 – 16 November 1974
, 2 November 1974 – 1 March 1976
Kostaq Postoli, 1 March 1976 – 15 July 1984
, 16 July 1984 – 15 July 1985
Kamber Myftari, 16 September 1986 – 28 February 1989
Qirjako Mihali, March 1989 – December 1990
Niko Gjyzari, 1 January 1991 – 31 August 1991

Governors of the Bank of Albania

Ilir Hoti, 1 May 1992 – 1 September 1993
Dylber Vrioni, 1 September 1993 – 1 December 1994
Kristaq Luniku, 1 December 1994 – 1 April 1997
Qamil Tusha, 15 April 1997 – 10 September 1997
Shkëlqim Cani, 10 September 1997 – 28 October 2004
Adrian Fullani, 28 October 2004 – 7 September 2014
Elisabeta Gjoni, acting, 7 September 2014 – 5 February 2015
, since 5 February 2015

Buildings

From its inception until the late thirties, the bank operated from a notable structure in Durrës, designed by architect Vittorio Ballio Morpurgo and completed in November 1928. On , it inaugurated a new headquarters on present-day Skanderbeg Square in Tirana, also designed by Morpurgo between 1930 and 1936. He was responsible for designing branches in Korçë, Shkodër, and Vlorë as well.

Throughout the Communist period, these interwar edifices remained in use by the State Bank. In 1993, the newly formed Banka Kombëtare Tregtare (BKT) took over former regional branch buildings while the central bank retained its Tirana headquarters and subsequently opened additional regional offices.

On , a training and research facility was established by the Bank of Albania in Berat, adapting a building from the 1970s to harmonize with the historic surroundings. In June 2010, it acquired the former Hotel Dajti located in central Tirana to serve as a venue for stakeholder engagement and public events. The Tirana head office underwent renovation and expansion during the early 2010s by Italian firm Petreschi Architects.

External links

Official website of the Bank of Albania Accessed on 01-03-2009.