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dc.contributor.author
Pajaj, Roden
en
dc.contributor.author
Ferzaj, Rezart
en
dc.date.accessioned
2015-06-05T08:52:04Z
dc.date.available
2015-09-27T05:56:47Z
dc.date.issued
2015-06-05
dc.identifier.uri
https://repository.ihu.edu.gr//xmlui/handle/11544/198
dc.rights
Default License
dc.title
Corporate governance framework and practice in Albanian banking sector
en
heal.type
masterThesis
heal.keyword
Dissertations, Academic
en
heal.keyword
Corporate governance
en
heal.keyword
Banks and banking--Albania
en
heal.language
en
heal.access
free
el
heal.license
http://creativecommons.org/licenses/by-nc/4.0
heal.recordProvider
School of Economics, Business Administration and Legal Studies, Executive MBA
heal.publicationDate
2012
heal.bibliographicCitation
Roden Pajaj and Rezart Ferzaj, 2012, Corporate governance framework and practice in Albanian banking sector ,Master's Dissertation, International Hellenic University
en
heal.abstract
In this paper we thoroughly analyse the corporate governance practices and its legal framework in the Albanian banking sector. Issues of “gaps” between banking regulation and corporate governance have recently remerged, once the global financial crisis exposed the flaws of past decade’s deregulation process in developed countries. In transition economies, these gaps are outcomes of transition challenges mostly related to the rule of law consolidation, ownership structure and professional and institutional capacities. Our analysis shows that the applied model of corporate governance in Albanian banking resembles an insider model of corporate governance, which contrasts with the legal and regulatory framework in place. We believe that this divergence is a direct outcome of ineffective law enforcement and the lack of market-based control instruments and incentives. The highly concentrated ownership structure of Albanian banks ultimately exacerbates agency problems, thus strongly affecting the pivotal role of the Board of Directors and agency relationships, at the cost of other stakeholders’ interests, like depositors and the regulatory agency that acts as an agent of public interest. The Albanian banking supervisory authority perceives sound governance of banks as an endogenous source for financial stability, public trust and consumer protection. Its commitment is continuously validated by a wide range of banking regulatory activities during and after the financial crisis. Our analysis on the independence banks’ Board of Directors shows that despite high standard legal requirements, there is room for a more active role of the Albanian banking regulatory authority in terms of enforcement of these requirements, following the guidelines of the Basel Committee and the European Union.
en
heal.tableOfContents
1 INTRODUCTION.............................................................................................................. 6 2 COUNTRY OVERVIEW AND THEORETICAL REVIEW........................................ 9 2.1 COUNTRY OVERVIEW ....................................................................................................... 9 2.1.1 Economic developments .......................................................................................... 9 2.1.2 The financial sector ............................................................................................... 10 2.1.3 Overview of banking sector in Albania ................................................................. 12 2.1.4 Capital markets ..................................................................................................... 13 2.2 THEORETICAL APPROACHES AND LITERATURE REVIEW ................................................ 13 2.2.1 Agency theory ........................................................................................................ 14 2.2.2 Stakeholder theory................................................................................................. 16 2.2.3 Outsider and Insider models of Corporate Governance ....................................... 17 2.2.4 Convergence of systems......................................................................................... 21 2.3 CORPORATE GOVERNANCE IN BANKS ........................................................................... 21 2.3.1 How banks differ from general firms..................................................................... 22 2.3.2 Important aspects of banks’ capital structure ....................................................... 22 2.3.3 Agency problems specific to banks........................................................................ 24 2.4 THE RELATIONSHIP BETWEEN CORPORATE GOVERNANCE AND REGULATION ............... 26 2.5 THE INTERNATIONAL RESPONSE TO THE FINANCIAL CRISIS FOR ENHANCING CORPORATE GOVERNANCE IN BANKS.......................................................................................................... 27 2.5.1 The Basel Committee on Banking Supervision...................................................... 27 2.5.2 Corporate Governance in the EU.......................................................................... 28 2.6 CORPORATE GOVERNANCE IN TRANSITION ECONOMIES ................................................ 29 3 CORPORATE GOVERNANCE IN ALBANIA............................................................ 32 3.1 A CORPORATE GOVERNANCE MODEL FOR ALBANIA..................................................... 32 3.1.1 Reforms in the legal framework of corporate governance .................................... 32 3.2 STATE OF PLAY............................................................................................................... 38 4 3.2.1 Financial Disclosure ............................................................................................. 40 3.2.2 Ownership structure .............................................................................................. 40 3.2.3 Legal environment – rule of law............................................................................ 43 4 GOVERNANCE IN ALBANIAN BANKS..................................................................... 44 4.1 OVERVIEW...................................................................................................................... 44 4.1.1 The financial crisis and Albanian banking sector ................................................. 44 4.1.2 Competition and ownership structure in Albanian banks ..................................... 46 4.2 THE LEGAL FRAMEWORK FOR BANK GOVERNANCE IN ALBANIA................................... 48 4.2.1 Qualifications and understanding of the role of Board members ......................... 49 4.2.2 Strategic objectives and corporate values............................................................. 52 4.2.3 Clear lines of responsibility and accountability.................................................... 53 4.2.4 Appropriate oversight by senior management....................................................... 54 4.2.5 Effective internal and external control .................................................................. 55 4.2.6 Compensation policies........................................................................................... 55 4.2.7 Transparency......................................................................................................... 56 4.3 APPLIED CORPORATE GOVERNANCE IN THE BANKING SECTOR.................................... 57 4.3.1 Boards’ independence in Albanian Banks............................................................. 58 4.3.2 What do banks think about board members’ qualifications? ................................ 61 4.3.3 Do banks fulfil legal requirements on Disclosure and Transparency?................. 62 4.3.4 Analysis results...................................................................................................... 62 5 CONCLUSIONS AND RECOMMENDATIONS ......................................................... 64
en
heal.advisorName
Prof. Selim, Georges
en
heal.committeeMemberName
Prof. Selim, Georges
en
heal.committeeMemberName
Anagnostopoulou, Seraina
en
heal.committeeMemberName
Prof. Pasiouras, Fotios
en
heal.academicPublisher
School of Economics and Business Administration, Executive MBA programme
en
heal.academicPublisherID
ihu
heal.numberOfPages
69
heal.fullTextAvailability
true


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