COMPETITION, EFFICIENCY AND STABILITY IN ALBANIAN BANKING SYSTEM

Competition policy in the banking sector is complicated by the necessity of maintaining financial stability. Greater competition may be good for (static) efficiency, but bad for financial stability. The issues regarding banking competition and its effects are of particular interest in transition countries, as bank credit there is by far the largest source of external finance for companies. This paper investigates the interrelationships among bank competition, efficiency and stability in Albania banking system and it compare with other transition countries. Initially had an increase in banking competition where the level of efficiency also has been growing and stability indicators have been generally good, but further intensifying competition has been associated with increased fragility of the banking system and reduced the level of efficiency. In the case of Albania the margin net interest as an efficiency indicator reacts negatively against the increase of non-performing loans degree. So, their levels and dynamics should be constantly supervised by policy-makers, assessing their implications and preparing the necessary measures.Banking competition, bank efficiency, financial stability

MINCER RATES OF RETURN TO EDUCATION IN THE EMERGING ECONOMY OF ALBANIA

In this paper we study the relationship between earnings and education measured in schooling levels. The main hypothesis to be tested is whether higher education levels reward with higher earnings the working labour force in Albania. We use cross section data from the Living Standards Measurement Survey (LSMS) of 2002 and develop a comprehensive framework for our quantitative analysis of the private returns to schooling and private incentives to invest in education. We construct estimates of the private return to each post-compulsory schooling level, taking into account the effects of education on wages. We find that only tertiary education provides significant positive returns with the upper secondary school being less rewarded. This finding might explain the reduced incentives to invest in additional post-compulsory schooling if this would not lead to tertiary.schooling, Mincer equation, returns to education

SIMILARITIES AMONG CEE COUNTRIES REGARDING FINANCIAL STABILITY INDICATORS

The globalization trend increases the financial linkages, increasing in this way the contagion effects. This issue become even more sensitive for post-communist European countries as their economies have created relatively new financial systems being currently of little experience, moreover when they become part of EU. Therefore, in this study we try to find similarities among CEE countries regarding financial stability indicators. We apply cluster analysis techniques for the period 2007-2011 in order to see also the trend of homogeneity of these countries. Among the CEE countries appear Czech Republic, Hungary and Slovak Republic as more integrated. Less integrated in these countries are Balkan countries, which tended to be in a long distance from the EMU cluster. Similarities are also required within SEE countries to clarify their position. This inclusion clarified the position of Albania, which seemed to have much more similarities with EMU group. Furthermore, seems even more obvious that Serbia is again far away from other countries. There is an increasing tendency of homogeneity of these countries in the last three years, more obvious in the last year of the period under the study