Meeting of Governor Softić and the BBA: Banking sector liquidity high

At the initiative of the Governor of the Central Bank of Bosnia and Herzegovina (CBBiH) Senad Softić, a meeting was held at the CBBiH premises in Sarajevo with representatives of the Banking Association of Bosnia and Herzegovina (BBA).

The meeting discussed the Decision of the CBBiH Governing Board on determining and maintaining reserve requirements and determining the CBBiH fee to banks on the reserve amount, which was adopted on 13 April 2016, and whose application begins on 1 July this year.

Governor Softić explained to the bank representatives the motives and reasons for adopting such a decision. The practical implementation of the said decision at the level of the banking sector and its impact on the banking sector in Bosnia and Herzegovina as a whole were discussed, as well as aspects of implementation for individual commercial banks.

It was pointed out that the current liquidity of the banking sector is high, and that even after the application of the new decision, the credit potential of banks will remain at a high level, leaving room for banks to continue supporting economic activity and financing quality projects.

In the part of the discussion on coordination between all parts of the financial and banking sector, bankers emphasized the necessity and gave support for strengthening the coordination of activities of entity banking agencies, as a legal competence of the CBBiH, with the aim of strengthening financial stability, better functioning and adoption of better quality regulations and solutions. The importance of better control of the banking sector carried out by the competent institutions was particularly emphasized.

Also discussed were the proposals for new entity laws on banks, which must ensure respect for the competences of all institutions to which the law applies, including the competence of the CBBiH, as the institution solely responsible for monetary policy and for the monetary policy instrument, the reserve requirement.

The representatives of the BBA, in the interest of transparency and unified functioning of the banking and financial system, supported the Single Register of Transaction Accounts, whereby it was pointed out that this register must be complete, with up-to-date data.