Dnevni avaz: The Governor of the Central Bank (CB) of Bosnia and Herzegovina, Kemal Kozarić claims that in our country there are no direct consequences of the economic crisis in the world, but that the indirect consequences are already obvious. He says that he is afraid for the standard of citizens, economic growth…..He said all this in conversation with “ Dnevni avaz” after the meeting with the World’s Bank (WB) and the International Monetary Fund (IMF) in Washington, where everything was subordinated to the global crisis.
Offered assistance
The IMF has expressed readiness to help us if it is needed, through technical, but through other kinds of assistance as well, if BiH grades that it is needed. Of course, the World’s Bank still remains directed towards BiH, there is a list of prepared projects, and there are also the European Bank for Renovation and Development (EBRD), the European Investment Bank (EIB)….So, between the lines there was a message that it will not leave us alone if it is needed and that we can count on that assistance" says Kozarić.
Where do you see the most reflected crisis in BiH?
Luckily our commercial banks are not directly involved in these affairs with mortgage loans. But, it is obvious that citizens are worried what will happen with their deposits, are their banks safe. Some of them mentioned the panics as well, although I will not call it that way and think that it will not happen. The CB has collected 100 million Euros and it is planned for the banks to answer to their clients. Did this perhaps caused a negative impact and caused the panic?
Importance of deposits
People asked for their deposits. I think this has helped and only first day we had those problems. As soon as the money arrived, we had the information that the situation is normal. I also talked to the biggest banks in which withdrawals of a million to two has been announced. We expect that this situation will calm down and do not expect that any of the banks in BiH will become insolvable.
Will the financial situation in BiH ever calm down?
I think that by this first wall of defense we will successfully overcome the crisis and there will be no bigger problems. But, the less of deposits by commercial banks, the fewer funds for placements, so the capital will become more expensive, and there will be more interests for credits. And the citizens will surely in this way be able to feel the crisis. Banks in BiH are 77% in the foreign ownership of the banks from Austria, Germany, Italy, and from which they do not have more possibilities to run into dept, so they directed to domestic deposits. Again, in case of withdrawing the deposits, the arrival to the fresh capital would be aggravated and the interests could increase.
What are the consequences for economy?
The economy is the problem, because it can come to situation that there is not enough money for support to some developmental projects and it is sure that the governments in BiH need to find other channels of financing as are the continuation of privatization of arrival of the foreign investors.
What can the CB do?
The Monetary board is a good model for such situations. Therefore, we will continue with the strong monetary politics, and will try to reduce the obligated commodity reserve of banks. That pattern is very high, and it would be 18%. There was also the suggestion to doubly increase the ensured deposit, which currently is 7.500 KM. This way we want to send a message that the country also worries for the citizens and simple deposits.