Although the first contacts with Albanian authorities started in 2004 during the Convergence Program’s pre-launch phase, the World Bank-Puglia Region conference on remittances in Bari on 3-4 March 2006 marked the beginning of the Convergence Program’s activities in Albania.

Consistent with our mandate to find practical solutions to financial intermediation opportunities, we made available to participants a concise compilation of concrete regulatory and technical interventions that would improve the service level to remittance providers and recipients.During the conference, Convergence built the case for public-private cooperation and presented an Action Plan proposal. It also summarized the proceedings of the conference.

Following the conference, Convergence teamed up with the Italian Banking Association to analyze the potential market for remittances flows to Albania from Italy.In a well attended seminar in Tirana on 27 July 2006, ABI presented an analysis of banking habits and needs of Albanian clients of Italian banks. Convergence offered an analysis of the best partnership opportunities, on a region-by-region basis, of Italian banks for the Albanian banking community. ABI hosted a similar meeting in Milan on 3 November 2006 where a delegation of Albanian banks met with more than ten Italian banks interested in building up their bank remittance products in connection with Albania.

Separately, as first introduction of the public-private partnership for financial sector modernization concept, Convergence helped organize a seminar in Tirana on 3 April 2006 where Prof. Francesco Cesarini illustrated the main features of the Italian Banking Association activities, based on his Report. At the same event, attended by the Albanian public and private financial sector community, Convergence tabled a proposal to establish an SPI-like structure in Albania.

In July 2006, as an example of evidence-based policy design, Convergence prepared for the Albanian Association of Banks an analysis of the potential impact on bank intermediation of the proposed changes in collateral enforcement procedures – an activity where the AAB had prepared a technical paper for official consideration.

A first attempt to launch an SPI Platform in Albania in the fall of 2006 failed because of the difficulty to identify suitable local staff to lead the SPI Secretariat. In December 2007, building on the success of the SPI Romania pilot and in the context of the Regione Puglia’s EU-supported Aquifalc project, preparatory work re-started. In early January 2008, Bank of Albania and Association of Albanian Banks asked the Convergence Program to help establish SPI Albania. On 19 January 2008, the Governor of Bank of Albania and the Vice-President of the Albanian Banking Association launched SPI Albania in a press conference in Bari, organized at the margin of Italy’s Annual Banking Convention, and chaired by Regione Puglia President Nichi Vendola.

Regione Puglia supported SPI Albania in the context of the Aquifalc project, financed by EU Regional Cooperation Funds, and implemented by the Centro Italo-Albanese per la Ricerca Economica e Sociale, affiliated with the Department of Economics of the University of Bari. Aquifalc has generously supported important analytical activities of the Program.

SPI Albania’s 2008 program was built on analytical approach involving extensive consultation process with SPI Albania stakeholders, through a questionnaire-based survey and interviews with banks’ and BoA’s representatives. The result of these consultations was a comprehensive pipeline, out of which stakeholders selected the top priority issues to be firstly undertaken under SPI Albania.

SPI Albania’s activities accomplishment for 2008 entail in completing three projects, promoting two legislative outputs and paving the path to further legislative amendment through its series of analytical recommendations to be fulfilled in 2009. In 2008 alone, there have been 13 projects working group meetings, gathering more than 60 professionals from 33 institutions, of which 17 public institutions and 16 private institutions. Please refer to the 2008 Annual Report for additional details on the activities.

The first six months of 2009 SPI Albania’s analytical activities were filled with project activities and important institutional milestones. On 23 January 2009 a specific SPI Albania conference highligthed the program’s achievements and impact on the Albanian Financial Sector. Please consult the SPI Albania Monthly Activity Reports for more details. For general information on SPI Albania, please refer to its portal.


Bosnia-Herzegovina’s public and private stakeholders were consulted several times during the Convergence Program’s design phase in 2003 and 2004 both in Sarajevo and Banja Luka. During the pre-launch activities, discussions were held with the banking supervisory authorities of the two entities on the idea to organize a one-day banking community summit to discuss a public-private modernization program. The Financial Supervision Commission was also interested in exploring the consultative method to prepare the new Securities Law.

While Convergence was not able to launch in-country activities, representatives of Bosnia-Herzegovina’s public institutions attended the Convergence Program’s regional activities in Ljubljana (Financial Regulatory Impact Assessment Knowledge Transfer) and Vienna (Regional Host Supervisory Cooperation). The latter program was actively co-managed by the Former Governor of the Central Bank of Bosnia-Herzegovina, Mr. Peter Nicholl.

Convergence Program experts (Mr. Sonje and Ms. Ognjenovic) spoke at a regional meeting of the European Forum of Deposit Insurers held in Sarajevo in December 2005 on the analytical framework for a more risk-sensitive financial policy for deposit insurance funds, based on the Romania’s experience.

Prospects for Bosnia-Herzegovina’s involvement in public-private financial sector modernization have resurfaced again in September 2009 when Italy’s Apulia Region has invited the Central Bank and the Association of Banks to join in a new regional partnership (together with Albania and Montenegro) to establish an Adriatic Bank-Enterprise Observatory which will prepare financial efficiency reforms, building on the experience in public-private governance and analytical collaboration of the Convergence Program’s SPI Platform. If EU IPA funds can be mobilized, this project will start in mid-2010.


Upon invitation by the Bulgarian Financial Supervision Commission, Convergence’s first activity in Bulgaria has been the organization of a Regulatory Impact Assessment Knowledge Transfer Program to help local institutions become more familiar with Regulatory Impact Assessment techniques between November 2008 and January 2009. Click here to read the seminar program and material.

This knowledge transfer seminar provided detailed information how Better Regulation RIA process is structured and on how to assess the costs and benefits of financial regulation. Participants worked on a practical case study on MiFID facilitated by UK FSA staff and carried out an Impact Assessment analysis on two regulations proposed by the Bulgarian Financial Supervision Commission. The workshop enjoyed an acclaimed success documented in this letter.

In addition, Convergence started discussions to support a pilot public-private evidence-based regulatory design project. It brokered the inclusion of the Financial Supervision Commission in a regional program partnership to develop RIA activities that applied, under Italy’s Apulia Region leadership, for EU financing under the South-East Europe Transnational Cooperation Program. Unfortunately, the project was not selected for financing.


Following preliminary discussions started in the fall of 2005, the Croatian Ministry of Finance invited Convergence in April 2006 to assist in the preparation of a proposal for a securitization law. In collaboration with EBRD and KfW, Convergence helped frame the first-ever public-private partnership for the preparation of Croatia’s securitization law, under the oversight of a steering committee created by the Minister of Finance, chaired by the Ministry of Finance with Croatian National Bank, Croatian Securities Commission, Croatian Banking Association, KfW, EBRD and Convergence participation. The first, and perhaps most important, step has been to design the architectural and governance arrangements for the project. Helping assemble a multinational team of legal experts to prepare an annotated terms of reference for the proposed law has been the second main step. Convergence’s specific contribution has been to establish the function of Independent Legal Advisor, supporting the Steering Committee in the consideration of the legal documents that, from time to time, will be sent for its consideration.

After commenting the terms of reference, and based on Steering Committee discussions, the Independent Legal Advisor prepared a summary document for market consultations. Ministry of Finance launched consultations with a press conference. Building on the market consultation feedback (including from the European Securities Forum) and using international comparative information compiled by a Convergence legal expert, the Independent Legal Advisor prepared drafting guidelines for the legal drafting team, composed largely of lawyers appointed by public institutions, with support from Arhivanalitika, a local financial advisory firm.

The Independent Legal Advisor issued two additional opinions, in December 2006 and in June 2007, on successive draft laws prepared by the legal drafting team. Reflecting the practical constraints experienced by the legal drafting team in drafting the law, the Independent Legal Advisor has also updated the drafting guidelines that will serve as benchmark as the final draft law begins its official enactment process.To facilitate enactment review, project coordinator Arhivanalitika has benchmarked the draft law against market feedback and Independent Legal Advisor opinion. Further changes in the draft law are possible before final enactment. In parallel, the Croatian Banking Association has sponsored the preparation of a Regulatory Impact Assessment of the proposed law. The exercise has helped authorities better assess the potential magnitude of the new financial flows generated by securitization, particularly with respect to the foreign indebtedness situation. Preparing a draft law in a public-private context is an elaborate process. But it is also a process that makes the best use of available expertise in the public and private sector alike, both domestically and internationally.

In February 2006 (Press Release), Prof. Cesarini discussed his Report on the role of the Italian Banking Association in promoting financial dvelopment in Italy at a seminar hosted by the Board of the Croatian Banking Association.


Engagement with Moldova started with an interaction with the leadership of the Association of the Moldovan Banks during the Annual Meeting of the Associates of the European Banking Federation, stimulated by the Convergence’s presentation.
In September 2008, Convergence was invited to preparatory discussions with public and private stakeholders in Chisinau (National Bank of Moldova, Ministry of Finance, commercial banks and the donor community). The visit culminated with a presentation to the Moldovan Financial Community, hosted by the Association of Moldovan Banks in the presence of the First Deputy Governor of the National Bank of Moldova. Discussions with Association of Moldovan Banks and National Bank of Moldova continued quite actively during the October 2008-March 2009 period, through correspondence and video-conferences. Difficulties in identifying adequate medium-term financing sources for the SPI Secretariat were a major obstacle in launching SPI Moldova. Contacts will continue as there was sufficiently strong interest by both public and private stakeholders to join forces for a financial modernization program.


Montenegro’s public and private stakeholders were consulted several times during the Convergence Program’s design phase in 2003 and 2004. Representatives of Montenegro’s public institutions attended the Convergence Program’s regional activities in Ljubljana (Financial Regulatory Impact Assessment Knowledge Transfer) and Vienna (Regional Host Supervisory Cooperation).

A more active engagement started in January 2008 when Montenegro’s stakeholders were invited to attend the press conference for the SPI Adriatic launch hosted by Italy’s Apulia Regione President Nichi Vendola, with Convergence Program’s technical support.

The Apulia Region invited Montenegro’s institutions to join a regional project partnership to develop evidence-based policy design activities with support from EU funding under the South-East Europe Transnational Cooperation Program. Unfortunately, the project was not selected for financing.
During the project partnership discussions, the Association of Montenegrin Banks hosted an op-ed written by the Convergence Program team in the July 2008 issue of its Bankar magazine.

Prospects for Montenegro’s involvement in public-private financial sector modernization have resurfaced again in September 2009 when Italy’s Apulia Region has invited the Central Bank and the Association of Banks to join in a new regional partnership (together with Albania and Bosnoa-Herzegovina) to establish an Adriatic Bank-Enterprise Observatory which will prepare financial efficiency reforms, building on the experience in public-private governance and analytical collaboration of the Convergence Program’s SPI Platform. If EU IPA funds can be mobilized, this project will start in mid-2010.


Convergence’s activities started in Romania in May 2005 with the invitation by the Romanian Deposit Guarantee Fund (RDGF) management to address the adequacy of the size of the fund and the related issue of the banks’ contribution through analytics and market consultations. Given the complexity of the assignment, Convergence prepared an initial issues note which, a few months later, was expanded into preliminary findings. In parallel, Convergence retained Marko Škreb, the former Governor of Croatian National Bank, to act as a peer reviewer throughout the process. Early and preliminary feedback was useful to determine the future course of action.

To provide the Romania financial community access to best European knowledge on deposit insurance issues, Convergence established a partnership with the Italian Deposit Insurance Fund (FITD). FITD arranged for Convergence to seek feedback on the Romania project in the October 2005 meeting of the European Forum of Deposit Insurers (EFDI) in Warsaw. A similar presentation was made in November 2005 to a group of international banks with significant Central and Southern Europe presence — in the context of the Convergence Group. FITD and Convergence discussed their joint analyses1 in a technical seminar with Romanian participants that proved essential to build common understanding on the institutional, market and financial considerations of a potentially revised RDGF financial policy. Shortly afterwards, Convergence further tested the analytical framework in an important EFDI regional meeting in Sarajevo.

Six months into the assignment, Convergence and FITD delivered their joint final conclusions (technical annex) to RDGF management with recommendations to adopt a new financial policy with a hybrid risk-based ex ante/ex-post financing mechanism to support an almost doubling of the fund’s size to support depositors’ confidence. The assignment concluded with a presentation to the RDGF Board, backed by the final Škreb independent opinion, and an intervention at the Symposium marking the RDGF’s 10th Anniversary on March 2, 2006. In March 2006, the Romanian Parliament enacted a series of law amendments to reflect the substance of the study recommendations.

To share the lessons learnt in this project in the region, Convergence partnered with the Bank of Albania and the Albanian Deposit Insurance Agency to organize a regional technical seminar on financial policy issues for transition countries on May 30, 2006. More than 100 participants attended the event that featured important presentations from international experts. The essence of the lessons learnt was captured in a World Bank technical note.

Following the successful RDGF pilot project, National Bank of Romania, Romanian Banking Association and Ministry of Public Finance launched a financial sector modernization program in the spring of 2006 with Convergence Program support. This decision followed a seminar In February 2006 Press Release, hosted by the Board of the Association of Romanian Banks with National Bank of Romania participation, where Prof. Cesarini discussed his Report on the role of the Italian Banking Association in promoting financial development in Italy. During this seminar, Convergence Program tabled a proposal to support ARB’s stepped-up involvement in analytical activities.The Convergence Management Group thoroughly discussed the approach to this initiative (newspaper ad) in its April 2006 Tirana Retreat.

The National Authority for Consumer Protection joins the partnership in October 2006. In June 2006, the Convergence Program shared with the Romanian stakeholders a vision for SPI Romania’s growth: strong discipline to generate and process a pipeline of reform proposals with quantified P&L impact on the banking sector that paves the way for a progressive shift of responsibility for analytical activities to the Romanian Banking Association under the Convergence’s honest-broker aegis.

Since its operational launch in September 2006, the program has dealt with twelve projects. Under its aegis, several important issues have been successfully addressed such as credit information sharing, anti-money laundering law, electronic settlement of debit payment instruments, and creation of a bank ombudsman. In parallel, the Convergence Program has delivered a structured Regulatory Impact Assessment program to enhance the evidence-based regulatory design capabilities of the Romanian regulatory community (part of the EU better regulation approach). In May 2007, the Romanian stakeholders decided to take over operational and financial responsibility for the program. This happened in March 2008, marking the end of a successful 2-year incubation by the Convergence Program. For general information on SPI Romania, please go to its portal.


After several consultations with the authorities and market participants in 2003 and 2004 during the design phase, Convergence Program started sharing the first lessons of its SPI Romania experience with Serbian public and private stakeholders in December 2006. A few months before, Convergence Program attempted to design a technical intervention downstream of a World Bank policy loan.Awareness-building continued with further visits to Belgrade in March, July and September 2007, followed by other meetings in July and October 2008. SPI Romania experts joined in several visits.

These visits enabled to identify an opportunity to channel the Convergence Program expertise in support of the Government’s Regulatory Simplification Program launched in January 2009, under oversight by the Deputy Prime Minister and Minister of the Economy.

The Serbian authorities requested Convergence Program assistance based on the latter’s proven track record of orchestrating a large project working group-based modernization program.The activities that the Convergence Program-funded Serbian leader of the so-called “Financial Guillotine” will undertake during 2009 are summarized in these Terms of Reference.

Convergence’s Serbia project, different from the Albania and Romania experiences, is based on an assessment of strong local committment and rich expertise to execute a large-scale modernization program. Accordingly, the Convergence Program does not take executive responsibility to operate the public-private partnership, not even on a temporary basis. However, it makes adoption of its work planning and analytical methodologies the core of its specific contribution.


To contribute to the development of the “better regulation” culture in the financial sector, Convergence has teamed up with the Ljubljana-based Center of Excellence in Finance (CEF) to offer a three-day seminar on Financial Sector Regulatory Impact Assessment on September 12-14, 2007. Click here for the 2007 seminar material.

After its success in 2007, a second edition of the Financial Sector Regulatory Impact Assessment seminar was held on September 29 - October 01, 2008. In addition to presentations by EU financial regulators and experts, this year’s program featured RIA case studies from Albania, Bulgaria and Romania delivered by local experts. Click here for the 2008 seminar material.

The association with the Center of Excellence in Finance started in 2004, when Convergence presented its proposed activities to CEF’s Supervisory Board.

In 2005, Convergence’s pre-launch planning envisaged relying on the Center of Excellence in Finance as logistical base for its regional operations, following discussions between World Bank senior management and Slovenia’s Ministry of Finance.

Beyond the activities with the Center of Excellence in Finance, the regional dimension was always important for the Convergence Program. Initially, together with the EBRD, it was associated with the convening of an informal group of strategic bank investors in the region, conveniently called “Convergence Group”, that met to share notes on most pressing regulatory constraints for their businesses. These informal discussions proved valuable to determine the appropriate boundaries for Convergence’s activities.

Shortly before its official launch, on April 28, 2005, Convergence outlined the general “honest broker” principles of a possible collaboration with the Convergence Group.

A year later, In a meeting hosted by EBRD on May 10, 2006, Convergence briefed regional market players about the SPI Romania concept which was designed to meet their needs for a structured interface with authorities.

Faithful to its public-private mandate, Convergence has also contributed to the emerging need for regional supervisor cooperation with two technical seminars in September and November 2006. Issues discussed were harmonization of reporting requirements, common approaches to consumer protection issues and governance of foreign-owned banks. Convergence presented a summary of this work to a Regional Financial Stability Conference organized by Bank of Albania on October 30-31, 2006.

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