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Sep 12, 2007 18:56 EEST
September 12 (SeeNews) - The European Central Bank (ECB) has recommended to Bosnia’s central bank (CBBH) to strengthen its banking supervision role and develop a long-term strategy for gathering more accurate statistical data, CBBH said on Wednesday.
The ECB has also called for the development of a money market in Bosnia in order to introduce incentives for domestic banks to strengthen their liquidity management, CBBH said in a statement summing up a needs assessment report compiled by the ECB.
The report compares CBBH’s functions - coordination of the activities of the licensing and supervision agencies, economic analysis and research, financial stability, internal audit, monetary policy under Bosnia's currency board arrangement and statistics - with the standards of the European System of Central Banks
“The present fragmentation of banking supervision is not an optimal situation. The report ... [suggests] strengthening the role of the CBBH in the coordination with foreign supervisors, as well as with other domestic supervisory bodies; enhancing the CBBH’s role to ensure the consistency of regulations; and harmonising disclosure policies,” the statement said.
War-divided Bosnia's banking supervision currently lies with the banking agencies of its two autonomous regions - the Muslim-Croat Federation and the Serb Republic.
The report also criticised the quality of statistical data that Bosnia’s central bank is able to gather and base its economic analyses on.
“The deficiencies in the availability of statistical data represent a serious drawback in this regard, especially with a view to developing econometric models that are necessary for a more accurate economic analysis,” the statement said.
The ECB recommended to CBBH to design a long-term strategy in the area of statistics in partnership with Bosnia’s three statistical agencies – those of the Federation and the Serb Republic and the central-level one.
The ECB, however, praised the success of Bosnia’s central bank functioning in the sphere of monetary policy under the existing currency board system.
It also said that, in the area of payment and settlements systems, “CBBH is at or very close to EU standards as far as operational aspects are concerned.”
“Areas where enhancements are needed include the development of the oversight role of the CBBH and the monitoring of market standards and activity in the payment and settlement systems field, in accordance also with EU Directives,” the statement said.
ECB’s report was the result of a six-month monitoring of CBBH implemented by the ECB in partnership with Deutsche Bundesbank, Eesti Pank, the Bank of Greece, Banco de Espana, Banque de France, Banca d'Italia, Oesterreichische Nationalbank and Banka Slovenije.
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