Former Yugoslav Republic of Macedonia Banking Soundness and Recent Lessons

International Monetary Fund

No 2000/145, IMF Working Papers from International Monetary Fund

Abstract: After several years of transition, major weaknesses in the banking and enterprise sectors remain the root cause of low growth. A large share of nonperforming assets in the portfolio of large banks, stemming from losses in the enterprise sector, has been a key impediment to financial sector development. The banking system has been crippled with low levels of intermediation, high cost of capital, severe lack of financial discipline, and poor allocation of credit. Reforms aimed at strengthening lending practices, encouraging foreign bank participation, improving bank supervision and, above all, a consolidation process that breaks away from the past are helping pave the path to economic recovery.

Keywords: WP; liquidity position; assets equivalent; balance sheet; credit portfolio; payment operation; Banking soundness; banking supervision; banking system assets; problem bank; banks discretion; illiquid bank; founding capital; liquidity needs; banks' liquidity needs; foreign exchange reserve; Commercial banks; Credit; Bank supervision; Bank deposits (search for similar items in EconPapers)
Pages: 33
Date: 2000-08-01
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