Bosnia and Herzegovina - Banking and securities

The central bank of Bosnia and Herzegovina is the National Bank of Bosnia and Herzegovina. In June 1992 Yugoslavia's central bank refused to issue Yugoslavian dinars in Bosnia and Herzegovina. Commercial banks in the country include Privredna Banka Sarajevo, Hrvatsk A Banka d.d. Mostar, and Investiciono-Komercijalua Banka d.d. Zenica.

In 1996, Croatian dinars were used in Croat-held areas for currency, presumably to be replaced by new Croatian Kuna. Old and new Serbian dinars were used in Serb-held areas. Hard currencies, such as the deutschmark, supplanted local currencies in areas held by the Bosnian government. In April 1997 the presidential council agreed on a single currency, the konvertibilni marka (KM), for both the Muslim/Croat and Bosnian Serb parts of the country.

Bank privatization is problematic, but improving. Some of the state-owned banks targeted for privatization were actually privatized during the war. Many are considered insolvent, but in 2001, individual bank deposits in Federation banks were up 178%. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $1.3 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $2.2 billion.

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