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This paper seeks to investigate the causal relationship between financial development and economic growth for Albania and Turkey, over the 1998- 2012 period. The international academic literature has not reached a consensus regarding the finance-growth issue, whereas particularly in the two countries, relevant empirical work is limited. For the purpose of investigation, five proxies of financial development are introduced in the case of Albania whereas considering its developed financial market two more indicators are added in the case of Turkey. The real GDP is used as proxy for economic growth. As soon as cointegration is established between each indicator of finance and the real GDP, it is tested for causality through the Vector Error Correction Model. Findings suggest that bi-directional causality exists between financial development and economic growth in Albania, both in the short and in the long-run. The same feedback relationship is discovered for Turkey but only in the long-run. Apart from the causality findings, it is noted that two indicators of the banking sector development have a significant negative impact on growth, more precisely, loans to deposits ratio and bank capital to assets ratio. To this extent, our findings have certain implications for the regulation of the banking sector in the countries under investigation and those similar to them. [ABSTRACT FROM AUTHOR]