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EU Confirms Equivalence of Banking Regulatory Framework in Bosnia and Herzegovina

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The European Commission has made a significant move by confirming that Bosnia and Herzegovina’s banking regulatory and supervisory framework is equivalent to EU standards. This decision represents a major achievement for the country on its path towards EU accession.

Background of the Equivalence Assessment

The equivalence assessment was carried out over several years, with key strategic activities undertaken by the Banking Agency of Republika Srpska and the Banking Agency of the Federation of Bosnia and Herzegovina to harmonize the regulatory framework with relevant EU regulations and directives. The process included:

  • Detailed reviews of requirements in accordance with European Banking Authority (EBA) principles
  • Coordination among entity banking agencies, the Association of Banks in Bosnia and Herzegovina, banks, the Central Bank of Bosnia and Herzegovina, and other business entities

Activities Undertaken During the Equivalence Assessment Process

The equivalence assessment process involved direct control activities and reviews by EBA experts, which included visits to Bosnia and Herzegovina. Although COVID-19 slowed down activities in 2020, intensive work continued in 2021.

Key Milestones of the Equivalence Assessment Process

  • 2019: Direct control activities and reviews by EBA experts took place
  • 2020: COVID-19 slowed down activities
  • 2021: Intensive work continued with coordination among stakeholders

Implications of the Equivalence Assessment

The results of the equivalence assessment are far-reaching, with implications for:

  • Deposit protection
  • Financial system stability
  • Cooperation between regulators and supervisors
  • Enforcement of internationally agreed standards
  • Independent and efficient supervision framework in Bosnia and Herzegovina

Future Impact on EU Accession Process

This achievement is crucial in the EU accession process, as it will impact future cooperation with EU institutions, rating assessments, risk weights for calculating capital requirements, interest rates, investment security, and other areas.

Commitment to Maintaining Banking System Stability

The Banking Agency of the Federation of Bosnia and Herzegovina and the Banking Agency of Republika Srpska remain committed to maintaining the stability and harmonization of the banking system in the interests of citizens and the economy.