Abstract
Throughout the world, banking industries are undergoing a rapid and sometimes startling process of consolidation, spurred occasionally by hostile takeover bids, but, more often, by friendly mergers by institutions that were once fierce competitors. Many changes have happened also to the Albanian banking sector those last years. Well known European banks have been taking an increased interest in Albania which has been finalized with a growing number of takeovers of local banks/financial institutions by western banks. The primary objective of the Supervisory Authority – Bank of Albania, therefore, should be to ensure that a merger will not be detrimental to the public interest and also not contrary to the interests of the banks concerned, their depositors or their controlling companies. Also the government intervention is necessary to restrain the behavior of bank management and to ensure the soundness of the financial system because of the negative impact of bank failures on economic activity. This paper analyzes the Albanian regulatory framework regarding acquisition process, and the compliance with particular core principle for effective banking supervision. Also, it describes the main regulatory principles that the regulators should take into account when considering particular applications. DOI: 10.5901/mjss.2015.v6n1p325
Highlights
Throughout the world, banking industries are undergoing a rapid and sometimes startling process of consolidation, spurred occasionally by hostile takeover bids, but, more often, by friendly mergers by institutions that were once fierce competitors
Well known European banks have been taking an increased interest in Albania which has been finalized with a growing number of takeovers of local banks/financial institutions by western banks
The primary objective of the Supervisory Authority – Bank of Albania, should be to ensure that a merger will not be detrimental to the public interest and not contrary to the interests of the banks concerned, their depositors or their controlling companies
Summary
Many changes have happened to the Albanian banking sector. Well known European banks have been taking an increased interest in Albania. The Emporiki bank in Greece, which operates in Albania, was taken over by Credit Agricole This interest towards Albania and other Eastern European emerging markets, has finalized with a growing number of takeovers of local banks/financial institutions by western banks. It’s a growing trend, last fall 3 of the 7 Albanian insurance companies were acquired by foreign firms, 2 Austrian companies (one is Uniqa) and one from Cyprus. Another fourth company is in negotiation process with an insurance company from Israel. Banks and insurance companies had good performance and have strengthened their financial stability 2 It is easier for a foreign company/bank to enter the market in this way, by taking over or merging with a local bank. Inflation has been under control for the last 9 years, the local currency is stable and banks are accurately controlled by the Central Bank (Bank of Albania)
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