Bosnia and Herzegovina: Financial System Stability Assessment
IMF Staff Country Reports, July 9, 2015
Source details
- Canonical URL
- Bosnia and Herzegovina: Financial System Stability Assessment
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Bibliographic details
- Published: July 9, 2015
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513546636.002
Executive summary
- Publication date: July 9, 2015
- Format: IMF Staff Country Reports 2015, 177 (2015)
- Pages: 76
- Volume: 2015
- Issue: 177
- Series: Country Report No. 2015/177
- DOI: https://doi.org/10.5089/9781513546636.002
- Stock No: 1BIHEA2015002
- ISBN: 9781513546636
- ISSN: 1934-7685
Key findings
- The financial system in Bosnia and Herzegovina (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,
- a history of lax lending policies.
- Bank governance problems, weak supervision powers, and related-party loans are obstacles to:
- addressing asset quality problems,
- 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.
- Identifying ultimate beneficial owners and related-party lending is problematic.
Risks and vulnerabilities
- Elevated nonperforming loans concentrated across the system.
- Low economic growth since the global financial crisis impeding debt restructuring and loan recovery.
- Legacy lax lending practices contributing to persistent asset-quality weaknesses.
- Governance weaknesses at banks that hinder timely corrective action.
Regulatory and supervisory issues
- Supervisory improvements since the 2006 Financial Sector Assessment Program have been achieved, but:
- supervisors’ corrective and enforcement powers remain weak;
- identification of ultimate beneficial owners is problematic;
- related-party lending is difficult to detect and address.
- Deposit insurer and bank resolution framework issues are among the subjects covered.
Subjects and keywords
- Subject: Bank resolution framework, Banking, Commercial banks, Financial crises, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Insurance companies, Stress testing
- Keywords: authorities of Bosnia and Herzegovina, authority, bank, Bank resolution framework, Bosnia and Herzegovina's authorities, Commercial banks, CR, deposit insurer, Financial Sector Assessment Program, Global, Insurance companies, ISCR, re-establishing bank profitability, standing liquidity facility, Stress testing
International Monetary Fund. Monetary and Capital Markets Department "Bosnia and Herzegovina: Financial System Stability Assessment", IMF Staff Country Reports 2015, 177 (2015).