BOSNIA AND HERZEGOVINA FALLS SHORT ON BANKING REGULATIONS COMPLIANCE

Despite Improvements, Bosnia and Herzegovina’s Banking Supervision Oversight System Remains Challenged

Background on the Financial Sector Assessment Program (FSAP)

A recent review of Bosnia and Herzegovina’s banking supervision oversight system was conducted by the International Monetary Fund (IMF) and World Bank in partnership with local authorities. The assessment aimed to evaluate progress made towards implementing key banking regulations.

Notable Advancements Since 2006

While significant challenges still exist, notable advancements have been achieved since the last comprehensive review in 2006. However, the latest findings reveal that several shortcomings persist, particularly in the system’s ability to effectively supervise Bosnia and Herzegovina’s banking sector.

Basel Committee Core Principles for Effective Banking Supervision

The Basel Committee Core Principles for Effective Banking Supervision serve as a benchmark for evaluating national supervisory practices. The assessment highlights key areas of concern, including:

• Inadequate supervision: Bosnia and Herzegovina’s banking supervision oversight system still requires strengthening to ensure effective supervision.
• Non-compliance with international standards: Continued efforts are needed to build a more robust financial framework that supports economic stability and growth.

Recommendations for Strengthening Banking Supervision Oversight

To address the identified shortcomings, Bosnia and Herzegovina should:

• Strengthen its banking supervision oversight system to ensure effective supervision of the country’s banking sector.
• Continue efforts to comply with international standards, including those outlined in the Basel Committee Core Principles for Effective Banking Supervision.

By implementing these recommendations, Bosnia and Herzegovina can build a more robust financial framework that supports economic stability and growth.