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Kosovo has a sustainable banking system

Prishtinë, 18 July 2007 - The Central Banking Authority of Kosovo (CBAK), held a press conference yesterday in Prishtina, where the CBAK officials presented the annual report for the year of 2006.

The Head of the CBAK Board, Ajri Begu spoke of the positive trends of the financial sector. Begu noted that the overall good environment, economic growth, decrease of inflation and a surplus of the Kosovo Budget are only some of the positive developments of the year. Furthermore, Kosovo has a sustainable banking system. This evaluation is based on the increase of deposits in Kosovar banks, on the increase of loan participation and on the supervision of the financial system in general. The GDP for 2006 has increased by 3% in real terms.

The Managing Director of CBAK, Michael Svetchine informed the journalists that the annual report of 2006 has been presented to the SRSG, Kosovo President, Fatmir Sejdiu and Head of the Kosovo Assembly, Kole Berisha in order to inform them on the progress and the development the CBAK has been through. According to Svetchine, the financial sector is one of the best functioning sectors in Kosovo; it is stable and presents financial security for all the people of Kosovo.

“Over 60 inspections in banking institutions, non banking and micro-financial institutions have taken place,” stated CBAK Deputy Director of Financial Supervision, Hashim Rexhepi. Concerning the general development, Rexhepi informed that some 220 banking offices have been established across Kosovo, insurance companies have had positive development trends, and agreements with neighbouring countries have continues as well.

Although the activities of bank supervision have intensified and are based on the supervision of risk and not on rules, Kosovo is still qualified as dangerous for the financial system due to lack of laws. The loan system continues to be short-term and with high interest rate, report RTK and KTV.

Some Kosovar dailies emphasised that the Serb bank “Komercijalna Banka”, which functions illegally in minority resided areas, will obtain the license from CBAK to fully operate. The license will be provided despite the Serb bank not acknowledging CBAK as a banking authority and refusing to fulfil the conditions required for obtaining this precise license. Concerning this issue, Begu said that the matter of illegally operating banks has been raised several times with the relevant authorities, all to no avail. The results are clear. The banks are operating, reported the media in Kosovo.

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