Annual Report 2010 03 August 2011 - Banka Qendrore e ...

CBK
Annual Report 2010
Governor’s Speech
Kosovo’s economy in 2010 continued to grow, based mainly on the growth of consumption
and investments. Improvements in the global economy had a significant impact on the
growth of Kosovo's exports and received remittances. Inflationary pressures at the global
level were also reflected in the Kosovo’s economy, due to the high dependency of our
economy on imports. Despite the increase of exports, trade deficit remains very high and
calls for finding a more sustainable model of growth and economic development for Kosovo.
The country's financial sector continued the increasing trend. Main financial soundness
indicators suggest a high level of stability for the Kosovo’s banking system. Reaching at
59.7 percent of GDP, banking system assets were among the main contributors to the
financing of consumption and investments in the country. Although still high, the degree of
the banking system concentration continued its downward trend. At the same time, the
insurance industry marked a reduction of tariffs for border insurance policies and an
increase of the claims reimbursement level. Kosovo Pension Savings Trust marked a price
increase per share units and better return on investments. In close cooperation with the
Ministry of Finance, concrete steps were taken in the creation of a modern infrastructure
for the securities market.
Besides providing stability for the financial sector, the CBK continued to improve the
quality of its services to authorities, financial community and the public. It has improved
the quality of supply with euro banknotes and coins and it was completed the full
electronization of payment orders for the major CBK customers. Also, the volume and value
of interbank payments increased, while the National Payments Council became fully
operational. The investment of the CBK assets is made under high security, adequate
liquidity and reasonable return on investments. Within the project on the development of
the business environment, the Credit Registry started the project of upgrading the credit
information, which is expected to result in a reduction of credit risk and consequently of
loan interest rates.
In 2010, the Assembly of Kosovo approved the new Law on the Central Bank of the
Republic of Kosovo, with more duties and responsibilities for the CBK in providing financial
and macroeconomic stability of the country. This year was also marked by the approval of
the Law on Deposit Insurance System and initiation for amendments and drafting of other
laws relevant to the financial sector (Law on banks, microfinance institutions and non-bank
financial institutions, the Law on Compulsory Third Party Liability Insurance, the Law on
payment systems, etc.), expected to be approved during 2011. The upgrading of the legal
framework of the financial sector is in line with the efforts aimed at the enhancement of the
business environment and the generation of new investments by foreign as well as domestic
investors.
In the field of statistics, for the first time was started with the reporting of balance of
payments statistics to the IMF on quarterly basis, while in the field of economic and
financial analysis should be emphasized the compilation of 'stress test' for the banking
system, monthly compilation of early warning indicators as well as the compilation and
publication of the first issue of the Financial Stability Report for Kosovo. Research work of
the CBK employees was awarded for the second time with the prestigious "Olga Radzyner"
award for young researchers. All these prove the high competence of the CBK employees in
the communication of our work to the domestic and international institutions and public.
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