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Trends behind Implementation of Basel Core Principles in Banking Sector of Bosnia And Herzegovina - A Look Back and a Look Forward

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  • Mehmed Ganic

Abstract

The aim of this paper is to analyze banking regulation in Bosnia and Herzegovina (B&H), as well as the reflection of implementation of Basel Core Principles on business of banks and certain trends in domestic banking. Questionnaire survey is used to investigate on possible concrete progress that is achieved in developing of the banking sector in B&H over the past decade. This paper represents the results of a research carried out on 19 out of 28 planned banks in B&H that were surveyed during summer of 2012. In addition, this paper analyzes the qualitative research whose main goal is to gain the respondents’ opinions about the past experiences and possible concrete progress that has been made in developing of the banking sector in B&H. Summarized results of the questionnaire, also, show that the consolidation of domestic banking market, although slow, is not yet fully completed and that the regulation in the field of banking supervision has a positive impact on improvement of the banks’ soundness, discipline and strengthening of their competitiveness. Additionally, our findings indicate that it can be expected to reduce the number of banks over the next several years. The banks are aware of the importance of the capital and its role in the stability of the banking sector in connection with the required minimum amount of capital supporting their needs to maintain capital requirements.

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  • Mehmed Ganic, 2014. "Trends behind Implementation of Basel Core Principles in Banking Sector of Bosnia And Herzegovina - A Look Back and a Look Forward," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 232-242, April.
    • Handle: RePEc:hur:ijaraf:v:4:y:2014:i:2:p:232-242
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    References listed on IDEAS

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    1. Demirgüç-Kunt, AslI & Detragiache, Enrica & Tressel, Thierry, 2008. "Banking on the principles: Compliance with Basel Core Principles and bank soundness," Journal of Financial Intermediation, Elsevier, vol. 17(4), pages 511-542, October.
    2. Richard Podpiera, 2006. "Does Compliance with Basel Core Principles Bring Any Measurable Benefits?," IMF Staff Papers, Palgrave Macmillan, vol. 53(2), pages 1-5.
    3. Tarullo, Daniel, 2008. "Banking on Basel: The Future of International Financial Regulation," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4235, April.
    4. World Bank, 2012. "Bosnia and Herzegovina," World Bank Publications - Reports 25893, The World Bank Group.
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