Though broadly sound, Bosnian banks are still dealing with the aftershocks of the global financial crisis, and credit growth in recent years has fallen to an annual average of 2 to 3 percent from 20 percent prior 2008.
"Maintaining the stability of the financial sector is a fundamental condition for macro-fiscal stability, which in turn is a key prerequisite for economic growth," Tatiana Proskuryakova, World Bank Country Manager for Bosnia and Montenegro, said in a statement.
Under an European Union-sponsored reform programme, which is also supported by the World Bank and the International Monetary Fund (IMF), Bosnia, which comprises two autonomous regions, has pledged to improve its banking regulation.
The country's two regions, the Bosniak-Croat Federation and the Serb Republic, face financing problems after failing to meet the terms for further disbursement of IMF aid under a 533 million-euro loan deal.
Copyright Reuters, 2017