DEVELOPMENT OF NONBANKING FINANCIAL MARKET THROUGH FISCAL INCENTIVES: ALBANIAN CASE

Flora Musta and Gentiana Sharku
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Flora Musta: Faculty of Economics, Tirana
Gentiana Sharku: Faculty of Economics, Tirana

Studies in Business and Economics, 2011, vol. 6, issue 1, 65-74

Abstract: An efficient financial market in any economy stimulates the economic growth through mobilizing the savings and promoting the investments. The Albanian economy has passed through a long period of transition which means a transformation of all the financial market and institutions. But not all the financial institutions are uniformly developed. Actually more attention is given to the transformation and development of the banking industry and less to the non-banking markets i.e. insurance, pension funds and securities market. Our paper is focused on these segments of the financial market, which account about 10 percent of the overall financial market. This little interest about these markets is explained by the mentality and culture of the population, the lack of knowledge about financial products, the passive role of government etc. There are many ways to stimulate and promote the development of these markets by the government and the market operators as well. The economic literature and the world experience show that fiscal system is one of the ways the government can and should use to promote the development of the financial institutions. The inclusion of tax facilities in the fiscal system will positively affect the progress of these institutions.

Keywords: non-banking financial institutions; voluntary pension schemes; insurance; securities market (search for similar items in EconPapers)
Date: 2011
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