Albania drafts new law to prevent smaller banks from collapse

The Bank of Albania has sent to parliament a bill which stipulates ways for the central bank to intervene in second-tier banks in emergency situations, local media reported Saturday.

One purpose of this bill is to avoid as much as possible the need for intervention by state funds, media reported, citing national bank experts.

The bill also aims to make available to the Bank of Albania a set of legal instruments to intervene in an early stage in case a bank runs into trouble or about to collapse, sources from the central bank said.

According to the draft, the Bank of Albania may have the right to dismiss and replace administrators and its governing bodies in second-tier banks.

The Albanian central bank will also be allowed to appoint a special administrator, transfer shares, assets and liabilities of second-tier banks to third parties without the approval of their shareholders or creditors, according to the bill. Enditem