The Influence of Financial System in Albanian Economy

Abstract

During the last years Albanian Financial System has continued its stable growth. The quite good financial outcome, in both
banking sector and non-bank financial sector, was due to the better use of the financial sources and the ongoing relatively quick
expansion of the investment activities with high return. The long-term trend for a gradual decline of the capital adequacy indicator of the
financial system and particularly of the banking sector has continued, but the declining rate is reducing. The assets of the financial
system have been steadily growing, but the weight of the non-banking financial sector still remains low, thus limiting the contribution of
this sector on the stable development of the overall financial system. This article discusses the progress and the influence that the
financial system has itself as a creator of money, not only lending. Is good for our analysis to remember how this concept has a direct
impact on economic factors such as: the commercial debt that has been raised in recent months, inflation which has increased, and
direct investments which have fallen. Naturally we are going to illustrate the principal methods that the financial management uses to
prevent the various risks that represent the financial market, and which are the most appropriate indicators to analyze the situation of the
Albanian financial system.