SEEU Review vol. 5 Nr. 2 (pdf) - South East European University

SEEU Review Volume 5, No. 2, 2009
Losses (negative profit) of central banks are covered from reserve fund or
from Ministry of Finance; it depends from the situation and the law of each
country. When we talk about financial independence we must mention a
positive fact. Southeastern Europe central banks are free to determine and
approve their budget and these banks can manage it independently from the
Council of Ministers, but there are some problems. Maastricht Tractate
prohibits the state to be the owner of central bank capital, profit
disbursement in the state budget, direct credit to government and losses
coverage. 16
The president and the members of the European Central Bank must report
to the European Parliament when commissioners or parliament members
request for the report 17 . So, accountability of European Central Bank (ECB)
is a legal and not a political obligation. ECB must send to the European
Parliament, to the European Council and Commission the annual report on
the activity of European System of Central Banks and on the monetary
policy. (article113 (3) of Tractate, article 15.3 of Statute). Discussions of
Governing Council of ECB are confidential and can be presented to the
public only if the Governing Board decides that. Southeastern Europe central
banks must report in their respective parliaments and these banks publish
periodic reports of monetary policy.
These central banks must increase the level of transparency and this will
further help in increasing the real independence that is different from legal
independence.
Albanian Case
Legal independence: In the recent years, the law on the Bank of Albania
has been amended several times and these amendments provided a modern
legal framework. The changes contributed to the increase of the legal
independence of the Bank of Albania. During the last decade, the elements
of legal independence (management, policy formulation, final objectives,
lending constrains) have been improved time after time. The coefficient of
legal independence of Bank of Albania is high but there is still need for
improvements, and it doesn’t indicate that the coefficient of real
independence is high. The law on Bank of Albania is good enough but in
order to become a member of European Union there is needed a better
16
17
Must be very clear who is responsible for central bank loss financing
Article 113 (3) of Tractate
59