Includes special features of this country’s banking system and rules/laws that might impact U.S. business.

With a growing number of foreign banks present in the country (83 percent of the total bank capital), competition is strong and banks are beginning to offer an extended product range of financial instruments (credit cards, consumer loans, mortgages).  However, the level of bank intermediation remains low, due to the slow restructuring of the economy.  Small and medium size enterprises still experience difficulties obtaining long-term credit, a problem exacerbated by the uncertain global economy.  Inadequate secured transaction regulations and an inefficient court system make collateral foreclosure difficult and increase the cost of capital.  There are currently 26 commercial banks operating in BiH, 17 in the Federation and 9 in the RS.

The BiH Central Bank (CCBiH) is the country’s monetary authority.  Its goal is to maintain monetary stability under the present currency board arrangement, with full coverage in freely convertible foreign exchange funds under a fixed exchange rate of 1 KM: EUR 0.51129.  In addition, the CBBiH supports and maintains appropriate payment and settlement systems and co-ordinates the activities related to supervision of commercial banks.  The Central Bank of BiH also coordinates the activities of the bank regulatory agencies in the two entities, which are in charge of bank licensing and supervision.

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