OHR assessing RS NA
recommendation

I’m sure you followed the
RSNA closely last night. The OHR is still assessing the contents of the
Recommendation adopted late yesterday evening. An initial review suggests that
the RSNA has shown a willingness to make progress in the reform. The Directorate
will continue to work and progress towards meeting their work plan.

It will be for the CoM and
the Directorate to consider elements of the Recommendation further.

Effective BiH
Banking Supervision

There is a substantial body
of legislation that will have to be enacted by the various parliaments in the
course of the summer if BiH is to meet the reform targets that it has set
itself. 

There have been over the past
few days discussions among various stakeholders about modernising banking
supervision in BiH – a key SAA requirement. Entity parliaments need to
enact the necessary transfer laws that will allow a central banking supervisions
system to be established in BiH.

A single banking supervision
system will further protect depositors, and, by increasing banking security and
maintaining the buoyancy of lending, will help to encourage investment and
create jobs.

Currently, banks in BiH are
supervised by the two Entity Banking Agencies. The fact that cross-Entity
banking has become the norm makes the existence of two banking regulators
superfluous and counterproductive. It is expensive and inefficient to
maintain separate organisations – and costs will rise further in the future as
BiH begins to comply with EU banking Directives over the next few years. This
will require special expertise, which will be more expensive if it has to be
offered by two organizations rather than one.

This is a reform has broad
political and popular support and which can deliver real benefits to citizens
very quickly. It is therefore crucial that the responsible ministers work
constructively to make the proposed change a reality. For all concerned a
positive and speedy agreement can represent a win-win situation.

If both Entity parliaments
enact the necessary agreements in the coming weeks, a modern European-standard
banking supervision system, under the aegis of the Central Bank rather than
separate Entity Banking Agencies, can be established before the October
elections.