Msc. Dorjana NANO
Faculty of Education and Social Sciences,
University “Eqrem Cabej” Gjirokaster, Albania
Email: doriananano@yahoo.com
and
Msc. Teuta LLUKANI
Faculty of Education and Social Sciences,
University “Eqrem Cabej” Gjirokaster, Albania
Email: t.llukani@gmail.com
Abstract
Recent global financial crises have caused immense debate about costs and benefits of financial integration. Overall, evidences show that industrial economies utilize benefits of financial openness and export their problems to the emerging and less developed countries. There is a substantial and empirical literature that define certain thresholds levels of financial and institutional characteristics beyond which the trade – off improves and makes opening of the capital account beneficial and less risky, especially for a developing country like Albania.
The main aim of this study is to analyse institutional quality, financial sector development, macroeconomic policies and trade openness as thresholds that must be satisfied in order to foster further financial integration and making it work for good, in particular for Albania and Greece. In addition, the comparison of economic characteristics and institutional development between these countries and the minimum standard will be also estimated, in order to reveal their discrepancy and deficiencies and as well to develop several policy proposals.
The main objectives of this study are:
- To analyse the importance of institutional quality, financial sector development, macroeconomic policies and trade openness in the process of financial integration.
- To estimate the above mentioned economic and institutional indicators for Albania and Greece and to use the standards level of this indicators (Prasad 2009) as a benchmark in order to reveal deficiencies, the most problematic aspects, and as well future challenges for each country.
- To draw and assess policy implications and recommendations for improving economic characteristics in Albania and Greece, in order to fully utilise the benefits of financial integration.