Bosnia and Herzegovina Banking Sector Gets Ready for Ethics Compliance

As Bosnia and Herzegovina continues its path towards economic stability and integration into the European Union, the banking sector is taking steps to strengthen its regulatory compliance framework. In this article, we will explore the importance of ethics compliance in the banking sector of Bosnia and Herzegovina.

A Unique Set of Challenges

Transitional countries like Bosnia and Herzegovina face a unique set of challenges when it comes to regulatory frameworks, particularly in the banking and financial sectors. The post-crisis period has brought about new rules for financial stability, which are aimed at protecting institutions from future financial disturbances.

Regulatory Framework

The new regulatory framework for the banking sector in Bosnia and Herzegovina has been established through the Federal Banking Act and the Banking Act of Republic of Srpska, along with bylaws adopted by banking regulators and agencies. This framework has formalized the Compliance function more than ever before, defining it as a control function within banks alongside Risk Management and Internal Audit.

Key Prerogatives of the Compliance Function

The legal prerogatives of the Compliance function include:

• Following compliance with banking regulations, bylaws, and standards for cautious banking, anti-money laundering, and counterterrorist financing procedures
• Identifying oversights and risk assessments resulting from non-compliance with laws and regulations
• Advising the management board on relevant regulations, standards, and rules
• Assessing the effects of changes in relevant regulations on the bank’s business

The Importance of Ethics Compliance

Bylaws provide a different perspective, stating that employees of the Compliance function must have knowledge of professional rules, good business practices, and business ethics. This regulation indicates that compliance prerogatives should not be limited to regulatory compliance but also include business ethics and good business practices.

Conclusion

As Bosnia and Herzegovina continues its economic journey, the banking sector’s focus on ethics compliance will play a crucial role in maintaining stability and supporting development. The establishment of a formalized Compliance function with clear prerogatives is an important step towards achieving this goal. By prioritizing ethics compliance, the banking sector can build trust with customers and stakeholders, and contribute to a stable and prosperous economy.