Regulation ”On risk management during the activity of savings and credit associations and their Unions”

Official Bulletin no. 196, dated October 25, 2016

The Bank of Albania agreed with decision nr. 105, dated 5.10.2016 to approve a regulation which aims to determine the rules for risk management during the activity of SCAs and their Unions.

Firstly, in this regulation are listed the principles and basic rules which constitute a responsible and effective management of SCAs where the emphasis is on the responsibility of governing bodies to recognize clearly and completely the risk profile, creating a system to prevent that risk so that capital levels could cover risks, the creation and development of a risk management system,an internal audit unit and the determination and approval of remuneration policies.

The following dispositions of the regulation contain provisions on risk exposure and respective restrictions, credit risk management and administration of some other risks such as the liquidity risk, operational risk and prevention of money laundering.

Chapter IV and V respectively include requirements regarding the implementation of the principle of transparency with members and reporting requirements as well as supervisory measures.