EU Regulatory Body Finds Bosnia and Herzegovina’s Banking Rules Equivalent to EU Standards

The European Banking Authority (EBA) has issued a significant opinion stating that Bosnia and Herzegovina’s regulatory requirements for banking are equivalent to those in the European Union. This finding is based on a thorough assessment of the country’s supervisory and regulatory framework.

Background: Equivalence Assessment

The EBA conducted an equivalence assessment, which involved collecting data from relevant third-country authorities and reviewing local legislative and regulatory documents. The assessment was supported by a Network of Equivalence (NoE) composed of experts from national competent authorities.

Scope of the Assessment

The scope of the assessment covered the regulatory and supervisory framework for credit institutions as foreseen in the Capital Requirements Regulation (CRR). The EBA used a qualitative approach with a five-grade scoring scale to assess the equivalence of Bosnia and Herzegovina’s rules with EU standards.

On-Site Visits and Assessment

The on-site visits conducted by EBA staff and experts from NoE allowed for a full understanding of the actual application of the supervisory framework in Bosnia and Herzegovina. The assessment was based on legislation and regulation in force at the time of the assessment, and planned future regulations were not considered unless they were already in an advanced stage.

Conclusion: Equivalence with EU Standards

As a result of the assessment, the EBA concluded that Bosnia and Herzegovina applies prudential, supervisory, and regulatory requirements and arrangements which are to be regarded as equivalent to those applied in the EU. This finding is expected to facilitate the treatment of exposures of institutions in Bosnia and Herzegovina by EU credit institutions and investment firms.

Impact and Future Prospects

The opinion will be published on the EBA’s website and is expected to have a positive impact on the country’s financial sector. The equivalence decision is seen as an important step towards further integration with the EU, which could lead to increased economic cooperation and stability in the region.