State Bank of Albania

Bank of Albania
Company type	Central bank
Industry	Banking, Financial services
Predecessor	National Bank of Albania (1925–1945), Albanian State Bank (1945–1992)
Founded	1925 in Rome, Italy (as National Bank of Albania)
Fate	Renamed from Albanian State Bank in 1992
Headquarters	Tirana, Albania
Area served	Albania
Products	Issuance of currency, Monetary policy, Banking supervision
Owner	Government of Albania
Website	www.bankofalbania.org

Adapted from the English Wikipedia article State 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 headquarters are situated in Tirana, complemented by five regional branches located in Shkodër, Elbasan, Gjirokastër, Korçë, and Lushnjë. Additionally, it maintains a Research and Training Center based in Berat.

Initially established in 1925 in Rome under the name National Bank of Albania (, , abbreviated as BKS or BKSH), this institution was superseded in 1945 by a state-owned entity known as the Albanian State Bank headquartered in Tirana (, BSS or BSHSH). The bank adopted its current designation, the Bank of Albania, in 1992.

Background

Following Albania's declaration of independence on 28 December 1912, the country lacked a central banking institution despite multiple efforts to establish one. During the leadership of Ismail Qemali, an initial "National Bank of Albania" was founded on , heavily influenced by foreign financial institutions such as Austria's Wiener Bankverein and Italy’s Banca Commerciale Italiana. This foreign control prompted resistance, culminating in a revolt in May 1914 against the regime led by Wilhelm von Wied and Essad Toptani. Consequently, the bank’s operations ceased after only a few months.

Throughout World War I, Albania experienced monetary instability amid foreign occupations. By the early 1920s, foreign currencies dominated economic transactions, leading to widespread dysfunction. In 1923, local municipalities were granted authority to issue their own banknotes. A League of Nations initiative proposed establishing a central bank structured as a cooperative enterprise supported by European governments, with Albania holding merely a 10% stake in its capital.

National Bank

With the establishment of the Albanian Republic under Ahmed Zogu, conditions became favorable for developing a more reliable financial system, albeit one heavily reliant on foreign involvement. On , Albanian officials and the Italian bank Credito Italiano, represented by Mario Alberti, signed an agreement to create the National Bank of Albania headquartered in Rome but operating within Albania. This agreement was ratified on , and the bank was officially founded on .

The convention from March 1925 set the initial capital at 12.5 million gold francs to be shared among Italian, Albanian, Yugoslav, Swiss, and Belgian investors. Although it was intended that Albanian stakeholders would hold half of this capital, their limited capacity and interest resulted in Italian parties controlling over half of the shares. In particular, 100,000 founders' shares were entirely owned by Italians and predominantly controlled by Credito Italiano. The remaining 495,000 common shares were allocated among various investors including Eqrem Vlora (11.7%), Nexhat Pasha Vlora (10.5%), Basler Handelsbank (10.1%), a Yugoslav consortium (10.1%), Ajet Libohova and Ugo Viali (each with 8.1%), along with several smaller Italian banking institutions and individual shareholders.

Despite bearing the title "National Bank," this institution operated beyond Albanian authority and has been characterized as a significant impediment to Albania’s economic sovereignty. Legally based in Rome and directed by Italian economist Amedeo Gambino, its governance structure followed models such as the State Bank of Morocco, dividing central banking functions among foreign capitals. Board meetings were conducted in Rome where Albania’s gold reserves were also stored. Political opposition to this foreign dominance allowed Ahmed Zogu to marginalize Mufid Libohova, a prominent official within Albania.

The National Bank's Roman headquarters was located at Piazza dell'Esedra, close to the Bank of Italy. Its Albanian branches opened sequentially: first in Durrës on 29 November 1925; then in Shkodër on 1 November 1926; followed by Vlorë on 15 November 1926; with further expansions into Berat, Elbasan, Korçë, and Sarandë.

During the period of the Italian protectorate of Albania (1939–1943), the National Bank encountered growing competition from Italian banks such as Banco di Napoli and Banca Nazionale del Lavoro, which expanded their activities within Albania. It also established a branch in annexed Prizren and considered extending operations into Montenegro, although this did not materialize. The bank’s currency issuance became highly inflationary during these years, increasing from 11.1 million francs at the end of 1937 to 108.4 million by late 1941.

Following German occupation beginning in September 1943, the National Bank continued functioning under challenging circumstances and was forced to relocate its gold reserves from Rome to Berlin.

State Bank

Following Albania's liberation from German control in late 1944, the Albanian operations of the National Bank were nationalized on 13 January 1945 and rebranded as 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 a department dedicated to retail savings in 1949, which was subsequently renamed the Institute of Saving Accounts and Insurance while remaining under the State Bank's umbrella. On , an Agricultural Bank was created as a separate entity but continued to operate within the unified banking framework.

Bank of Albania

After the fall of communism in Albania in December 1990, significant financial restructuring commenced. The Albanian Commercial Bank (, BTSH) was founded on , spun off from the State Bank’s commercial functions and took control of branches outside Tirana. Later, on , BTSH merged with another spin-off, the Albanian National Bank (, BKSH, established in 1992), resulting in the formation of Banka Kombëtare Tregtare (BKT, National Commercial Bank), which underwent privatization in 2000 and eventually came under the ownership of Çalık Holding.

The Institute of Saving Accounts and Insurance transitioned into the Savings Bank and was privatized in 2004 as Raiffeisen Bank Albania ().

In 1992, the State Bank was renamed the Bank of Albania and took on the role of central bank within the newly introduced two-tier banking system.

In 1996, Albania recovered most of its gold reserves previously held by the former National Bank.

Operations

The principal mandate of the Bank of Albania is to ensure price stability. It facilitates the advancement of foreign exchange policies, domestic financial markets, and payment systems while contributing to enhanced monetary conditions and credit accessibility.

As the issuer and manager of the national currency, the bank carefully balances money supply with credit availability to curb inflation and foster economic growth by preserving stable prices.

Moreover, it acts as fiscal agent for the Albanian Government by overseeing government accounts and managing both domestic and international financial transactions. Nonetheless, government revenue collection and expenditure are executed through commercial banks rather than directly by the Bank of Albania.

Monetary policy

The Bank of Albania exclusively governs Albania’s monetary policy with an emphasis on maintaining price stability. Its policy framework is grounded in statutory regulations, economic models for forecasting inflation, and a suite of monetary instruments designed to meet these targets. The bank aims to keep annual inflation near 3.0%, allowing a margin of +/- 1 percentage point; inflation stood at 1.7% during Q3 2014.

Central to liquidity management are open market operations involving buying and selling securities to control short-term liquidity within banks and stabilize interest rates in financial markets. Standing facilities provide banks with unrestricted access to or absorption of overnight liquidity under normal circumstances, thereby influencing short-term interest rate fluctuations.

Minimum reserve requirements serve to regulate liquidity within banks and stabilize interest rates. Commercial banks are mandated to maintain reserves amounting to 10% of their reserve base for both Lek and foreign currency liabilities. The bank allows averaging mechanisms whereby institutions must hold at least 40% of their required reserves on average by period-end. Reserves held in Albanian currency accrue interest based on the base rate, while foreign currency reserves earn interest tied to benchmark rates set by the European Central Bank and Federal Reserve.

Banking Supervision

The Bank of Albania is responsible for overseeing all banking operations within the nation, including the authorization and ongoing evaluation of institutions to guarantee adherence to applicable laws and regulations.

The objectives of its supervisory role are to:

safeguard the stability of the banking sector and protect depositors along with the general public;
maintain a transparent, market-oriented, and robust banking framework;
enhance investor trust while encouraging sustainable growth and profitability in the banking industry.

Primary supervisory duties encompass:

granting licenses exclusively to owners and management who satisfy legal, professional, and ethical criteria, hold sufficient capital proportional to their risk exposure, and enforce effective risk management policies;
verifying that banks maintain sound operations with adequate capital, liquidity, asset quality, and risk controls in line with global best practices;
addressing banking challenges swiftly to shield depositors and reduce potential government financial burdens.

To fulfill these aims, the Bank of Albania:

formulates and revises regulations concerning market entry, prudential banking activities, bank resolution processes, and ensures enforcement;
designs risk-based supervisory frameworks and approaches tailored to individual banks as well as the overall system;
sets procedures and standards consistent with international benchmarks;
guarantees uniform application of supervisory measures;
recruits and retains qualified personnel for efficient oversight;
maintains active dialogue with industry stakeholders and regulatory counterparts 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, September 2014 – February 2015
, since February 2015

Buildings

From its establishment until the late-1930s, the bank operated out of a notable office located in Durrës, within a structure designed by architect Vittorio Ballio Morpurgo that was completed in November 1928. On , a new central headquarters was inaugurated on present-day Skanderbeg Square in Tirana, shifting primary operations from Durrës. Morpurgo was also responsible for designing branch offices in Korçë, Shkodër, and Vlorë.

Throughout the Communist period, these interwar buildings continued to serve as facilities for the State Bank. In 1993, the newly established Banka Kombëtare Tregtare (BKT) assumed control over former regional branch properties, while the central bank retained its Tirana headquarters and subsequently opened new regional branches.

On , the Bank of Albania launched its training and research facility 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 accommodate stakeholder meetings and public events. The Tirana headquarters underwent renovation and expansion during the early 2010s under the direction of Italian firm Petreschi Architects.

External links

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