Bosnia and Herzegovina: Financial System Stability Assessment

International Monetary Fund

No 2015/177, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper discusses key findings of the Financial System Stability Assessment on Bosnia and Herzegovina (BiH). The financial system in BiH is still dealing with the aftershocks of the global financial crisis as well as deep-seated vulnerabilities. A high system-wide nonperforming loan ratio reflects the impact of the crisis, low growth since then, and a history of lax lending policies. Bank governance problems, weak supervision powers, and related-party loans are obstacles to addressing asset quality problems and re-establishing bank profitability. Banking and insurance oversight have improved since the 2006 Financial Sector Assessment Program, but supervisors’ corrective and enforcement powers are weak and identifying ultimate beneficial owners and related-party lending is problematic.

Keywords: ISCR; CR; bank; authority; authorities of Bosnia and Herzegovina; Bosnia and Herzegovina's authorities; deposit insurer; standing liquidity facility; re-establishing bank profitability; Commercial banks; Bank resolution framework; Stress testing; Financial Sector Assessment Program; Insurance companies; Global (search for similar items in EconPapers)
Pages: 76
Date: 2015-07-09
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