Competition in Albanian banking sector
By comparison with the region we found that in Albania operates a smaller number of banks and higher fees are applied. Also lending interest rates are higher than in the region, although the differences are not very large. Albanian banking system is more concentrated than the systems of most European Union countries; however, the concentration level is justified to some extent by the short lifespan of our banking system and its level of development, compared with EU countries. Economic theories of competition in the banking system study the linkage of the financial stability and its efficiency. From our observations, we have noted that the increase of the concentration was associated with increased efficiency (and vice versa). This finding supports the idea of efficient markets, whereby the concentration increase is due to higher efficiency. Also, a link between stability and competition was noticed, where the reduction of market power and the increasing competition, increased the undertaken risk by the banking sector, jeopardizing stability.