The Policies of Bank of Albania for Providing Financial Stability

Abstract

This study is an attempt to look onto the hypothesis, forecasts and questions that are now at the center of the economic world debates on ensuring financial stablity. The purpose of this study is to give a contribution in improving the use of the macroprudential instruments and the real impact they have on the economy. This study aims to collect and analyse data in assessing the performance of the macroprudential instruments, to create institutional regulations in regards to monetary policy and to make a prediction about the right moment when these instruments should be activated. It may be possible that crises are less costly for the economy and achieve the financial stability. These macroprudential instruments, adapted acording the characteristics of each country, may be able to utilise all the appropriate means to contain the systemic risk. The main focus of this study is to analyse the monetary policies and the macroprudential instruments used by central banks as the supervisory authorities in ensuring financial stability. The macroprudential instruments include the inherited requests and the accumulation of the capital in the perspective of the provisions of liquidity indicators and the prudential assessment of the collateral. The master-economist must possess a rare combination of gifts. He must be mathematician, historian, political leader, philosopher -- in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man's nature or his institutions must be entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood, as aloof and incorruptible as an artist, yet sometimes as near to earth as a politician.†John Maynard Keynes

 Key Words: Macroprudential instruments; Financial stability;    Institutional regulations; Non-conventional monetary.