{ "title": "Stress Testing the Albanian Banking Sector: A Decade Post-FSAP", "publication": "Selected Issues Papers, April 16, 2025", "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278", "canonical": "https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278", "overlayPath": "/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278/index.md", "summary": "Over the past decade, the Albanian banking sector has undergone a remarkable transformation amid strong macroeconomic performance and sound financial reforms.", "sections": [ { "heading": "Authors and Publication", "content": "- By Jakree Koosakul, Eugena Topi\n- April 16, 2025\n- Selected Issues Paper No. 2025/039\n- Pages: 13\n- Volume: 2025\n- Issue: 039\n- DOI: https://doi.org/10.5089/9798229007603.018\n- ISBN: 9798229007603\n- ISSN: 2958-7875" }, { "heading": "Executive summary and context", "content": "- Over the past decade, the Albanian banking sector has undergone a remarkable transformation amid strong macroeconomic performance and sound financial reforms.\n- Pockets of vulnerability remain, including some identified during the IMF’s 2014 Financial Sector Assessment Program (FSAP).\n- The paper conducts capital adequacy and liquidity stress testing exercises using supervisory bank-level data to assess sector resilience." }, { "heading": "Stress testing approach", "content": "- Exercises: capital adequacy and liquidity stress testing.\n- Data: supervisory bank-level data.\n- Shock channels explicitly assessed: non-performing loans, interest rates, large-borrower exposures, and sovereign exposures.\n- Liquidity testing considers banks’ holdings of high-quality liquid assets and access to the Bank of Albania's liquidity facility." }, { "heading": "Key findings", "content": "- Banks show broad resilience to shocks arising from non-performing loans and interest rates.\n- Vulnerabilities owing to large-borrower and sovereign exposures are material in some cases.\n- Under liquidity stress scenarios, banks are found to have adequate high-quality liquid assets, but:\n - Such resilience hinges importantly on their access to the Bank of Albania’s liquidity facility.\n- The overall assessment indicates progress since the 2014 FSAP but highlights remaining concentrated risks." }, { "heading": "Policy implications and recommendations", "content": "- Further strengthening of the macroprudential toolkit is warranted.\n- Continued efforts to deepen financial markets are recommended to reduce reliance on central bank liquidity support and to mitigate large-borrower and sovereign concentration risks." }, { "heading": "Subjects and keywords (as listed)", "content": "- Subjects: Asset and liability management; Capital adequacy requirements; Commercial banks; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Liquidity; Liquidity requirements; Stress testing.\n- Keywords: Albania; Albanian banking sector; Bank of Albania's liquidity facility; banking sector; capital adequacy; Capital adequacy requirements; Commercial banks; Eugena topi; Global; large exposure; LCR value; liquidity; Liquidity requirements; resilience hinge; sovereign-bank nexus; stress testing.\n\nSource: \"Stress Testing the Albanian Banking Sector: A Decade Post-FSAP\", Selected Issues Papers (2025), by Jakree Koosakul and Eugena Topi; DOI: https://doi.org/10.5089/9798229007603.018\n\n---\n\n Content in this bundle\n\n- Stress Testing the Albanian Banking Sector: A Decade Post-FSAP\n - Stress Testing the Albanian Banking Sector: A Decade Post-FSAP (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Stress Testing the Albanian Banking Sector: A Decade Post-FSAP (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278" } ], "bullets": [ "[Markdown version](/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278/index.md)", "[Structured JSON version](/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278/index.json)", "[Bundle manifest](/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278/bundle-manifest.json)", "Authors: Jakree Koosakul, Eugena Topi", "Published: April 16, 2025", "Series: Selected Issues Papers", "DOI: https://doi.org/10.5089/9798229007603.018", "By Jakree Koosakul, Eugena Topi", "April 16, 2025", "Selected Issues Paper No. 2025/039", "Pages: 13", "Volume: 2025", "Issue: 039", "DOI: https://doi.org/10.5089/9798229007603.018", "ISBN: 9798229007603", "ISSN: 2958-7875", "Over the past decade, the Albanian banking sector has undergone a remarkable transformation amid strong macroeconomic performance and sound financial reforms.", "Pockets of vulnerability remain, including some identified during the IMF’s 2014 Financial Sector Assessment Program (FSAP).", "The paper conducts capital adequacy and liquidity stress testing exercises using supervisory bank-level data to assess sector resilience.", "Exercises: capital adequacy and liquidity stress testing.", "Data: supervisory bank-level data.", "Shock channels explicitly assessed: non-performing loans, interest rates, large-borrower exposures, and sovereign exposures.", "Liquidity testing considers banks’ holdings of high-quality liquid assets and access to the Bank of Albania's liquidity facility.", "Banks show broad resilience to shocks arising from non-performing loans and interest rates.", "Vulnerabilities owing to large-borrower and sovereign exposures are material in some cases.", "Under liquidity stress scenarios, banks are found to have adequate high-quality liquid assets, but:", "The overall assessment indicates progress since the 2014 FSAP but highlights remaining concentrated risks.", "Further strengthening of the macroprudential toolkit is warranted.", "Continued efforts to deepen financial markets are recommended to reduce reliance on central bank liquidity support and to mitigate large-borrower and sovereign concentration risks.", "Subjects: Asset and liability management; Capital adequacy requirements; Commercial banks; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Liquidity; Liquidity requirements; Stress testing.", "Keywords: Albania; Albanian banking sector; Bank of Albania's liquidity facility; banking sector; capital adequacy; Capital adequacy requirements; Commercial banks; Eugena topi; Global; large exposure; LCR value; liquidity; Liquidity requirements; resilience hinge; sovereign-bank nexus; stress testing.", "**Stress Testing the Albanian Banking Sector: A Decade Post-FSAP**" ], "related": [ { "title": "Stress Testing the Albanian Banking Sector: A Decade Post-FSAP", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025039.pdf", "summary": { "path": "/-/media/files/publications/selected-issues-papers/2025/english/sipea2025039.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/selected-issues-papers/2025/english/sipea2025039.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278/index.md", "json": "/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278/index.json", "bundleManifest": "/en/publications/selected-issues-papers/issues/2025/04/15/stress-testing-the-albanian-banking-sector-a-decade-post-fsap-566278/bundle-manifest.json" }, "generatedAtUtc": "2026-09-20T20:33:08.329Z" }