During the last two decades the process of decentralization has been extended worldwide. This process has taken place in developed countries but in nowadays, this process is also being applied in developing countries in order to challenge the monopoly of centralized decision making of governments. The decentralization reform in Albania has done progress during the transition period. Today the local governance in Albania is absorbing and implementing the decentralization legal framework which is approved up to now and also is moving toward a complicated but progressive process of decentralization and autonomy that combines the decentralization of functions/services with fiscal decentralization supported by the process of strengthening the local democracy and accountability through free election and local community participation. This practice is supported by the economic theory of decentralization that it is a process that can and should lead to the improvement of the services that citizens receive from government by balancing local needs and expectations regarding the quantity, quality, cost and mix of services. This paper makes a snapshot of the process of decentralization by evaluating what has already been achieved, what is in process and what are the challenges laid ahead. It does the analysis of fiscal decentralization and fiscal autonomy in Albania and also gives a short description about the European models (West and East European countries). This paper touches upon the main achievements and challenges on all the complex issues that relate to decentralization. It is mainly focused on the progress of decentralization during the last couple years.

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The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance." Corporate governance in financial institutions is the set of standards and principals used to create a system of checks and balances over the management of banks and financial intermediaries. It establishes the way financial institutions are directed and controlled, ordinarily through standards set for the conduct of the board of directors and senior management. Countries have different political and regulatory environments, business standards and customs. Additionally, independent legal systems varying from country to country cause significant differences in corporate governance practices. There is, however, an international movement toward universal standards for all multinational financial institutions that has been gaining traction since the late 1990s. The topic of corporate governance of financial institutions and its role in stabilizing the industry has reached new levels of importance since the mid 1990s as a result of the globalization of financial markets, deregulation and technological change. The Corporate Governance in banks is one of the most important discussions overall the world, being reinforced especially after the crises period. This paper (discusion in conference) aims to evaluate the impact of corporate governance on financial performance, in the same time we are analyses corporate governance with focus in financial institution buth with importance of corporate governance in all aspects as a part of transition economies that has implement this CG.