Identifier
Created
Classification
Origin
08TIRANA757
2008-10-16 11:08:00
CONFIDENTIAL
Embassy Tirana
Cable title:
ALBANIAN BANKS SEE HIGHER WITHDRAWALS
how-toVZCZCXRO6997 OO RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR DE RUEHTI #0757 2901108 ZNY CCCCC ZZH O 161108Z OCT 08 FM AMEMBASSY TIRANA TO RUEHC/SECSTATE WASHDC IMMEDIATE 7512 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
C O N F I D E N T I A L TIRANA 000757
SIPDIS
DEPT FOR EUR/SCE JISMAIL, TREASURY FOR VIMAL ATUKORALA
E.O. 12958: DECL: 10/16/2018
TAGS: EFIN ECON PGOV AL
SUBJECT: ALBANIAN BANKS SEE HIGHER WITHDRAWALS
Classified By: POLECON Chief Paul Poletes, reasons 1.4 (b),(d)
C O N F I D E N T I A L TIRANA 000757
SIPDIS
DEPT FOR EUR/SCE JISMAIL, TREASURY FOR VIMAL ATUKORALA
E.O. 12958: DECL: 10/16/2018
TAGS: EFIN ECON PGOV AL
SUBJECT: ALBANIAN BANKS SEE HIGHER WITHDRAWALS
Classified By: POLECON Chief Paul Poletes, reasons 1.4 (b),(d)
1. (C) Albania seems to be weathering the global credit
crunch better than many Western countries but there are signs
of potential problems. Recently, the Ministry of Finance
postponed a Eurobond offering, originally scheduled for late
spring, due to turbulence in the credit markets and the
possible additional risk due to national elections next
summer. The Eurobond would have been the first one issued by
Albania.
2. (C) Although official statistics for September have not
yet been released, some bankers are saying that private
depositors have been withdrawing their savings at an
increasing rate. According to the Central Bank's Director of
Financial Stability, the CB is monitoring the situation
closely, but considers the activity, which does not seem to
be affecting corporate accounts, normal considering the
turmoil in the global financial markets. The withdrawals
seem to be an emotional reaction to media reports of
weaknesses in global credit markets rather than any specific
problem with Albanian banks. The CB has also offered
additional liquidity to commercial banks as needed, but so
far has not received any requests. The banking system is
further protected by legislation preventing foreign-owned
banks from moving deposits out of Albania.
3. (C) COMMENT: If world stock markets begin to stabilize
and media reports turn more optimistic, the withdrawals will
likely decelerate. Albania's credit markets are still quite
small, with loans at 53 percent of deposits compared to 140
and 160 percent in the UK and US respectively. However, the
Albanian economy is strongly dependent on remittances, which
may decline as workers in Western countries feel more
economic pressure and send less money home. This may lead to
a possible slowdown in the Albanian economy, although there
are no specific signs yet. In addition, Albanian depositors
are generally skittish, and further financial troubles abroad
could well lead to further panicky withdrawals as customers
eschew banks for mattresses in hopes of riding out the storm.
WITHERS
SIPDIS
DEPT FOR EUR/SCE JISMAIL, TREASURY FOR VIMAL ATUKORALA
E.O. 12958: DECL: 10/16/2018
TAGS: EFIN ECON PGOV AL
SUBJECT: ALBANIAN BANKS SEE HIGHER WITHDRAWALS
Classified By: POLECON Chief Paul Poletes, reasons 1.4 (b),(d)
1. (C) Albania seems to be weathering the global credit
crunch better than many Western countries but there are signs
of potential problems. Recently, the Ministry of Finance
postponed a Eurobond offering, originally scheduled for late
spring, due to turbulence in the credit markets and the
possible additional risk due to national elections next
summer. The Eurobond would have been the first one issued by
Albania.
2. (C) Although official statistics for September have not
yet been released, some bankers are saying that private
depositors have been withdrawing their savings at an
increasing rate. According to the Central Bank's Director of
Financial Stability, the CB is monitoring the situation
closely, but considers the activity, which does not seem to
be affecting corporate accounts, normal considering the
turmoil in the global financial markets. The withdrawals
seem to be an emotional reaction to media reports of
weaknesses in global credit markets rather than any specific
problem with Albanian banks. The CB has also offered
additional liquidity to commercial banks as needed, but so
far has not received any requests. The banking system is
further protected by legislation preventing foreign-owned
banks from moving deposits out of Albania.
3. (C) COMMENT: If world stock markets begin to stabilize
and media reports turn more optimistic, the withdrawals will
likely decelerate. Albania's credit markets are still quite
small, with loans at 53 percent of deposits compared to 140
and 160 percent in the UK and US respectively. However, the
Albanian economy is strongly dependent on remittances, which
may decline as workers in Western countries feel more
economic pressure and send less money home. This may lead to
a possible slowdown in the Albanian economy, although there
are no specific signs yet. In addition, Albanian depositors
are generally skittish, and further financial troubles abroad
could well lead to further panicky withdrawals as customers
eschew banks for mattresses in hopes of riding out the storm.
WITHERS