Financial system development progress in Western Balkans

  • Received December 14, 2016;
    Accepted January 18, 2017;
    Published June 23, 2017
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  • DOI
    http://dx.doi.org/10.21511/bbs.12(2).2017.01
  • Article Info
    Volume 12 2017, Issue #2, pp. 7-19
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Financial system supports economic growth, while its regulatory framework provides stability for investors. Develo-ping countries with bank-oriented financial systems are not attractive to investors, so prolonged status quo leads to economic deterioration. This is particularly the case with some of the most underdeveloped areas in Europe: Western Balkans. It is essential the developing countries in this region consider steps towards financial liberalization, which will help open the borders for capital flows and attract new investments. The main goal of this paper is to review and present the available information related to the banking system development in Western Balkans in terms of ownership structure, capital adequacy, loan and asset performance, return on investment and liquidity. These indicators should provide a clearer picture of the current financial systems in Western Balkans economies and their development progress – useful for comparison with other developing regions and financial transformation and liberalization efforts.

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    • Fig. 1. The ownership structure of banks in Albania
    • Fig. 2. The ownership structure of banks in Bosnia and Herzegovina
    • Fig. 3. The ownership structure of non-residents’ share capital
    • Fig. 4. The Ownership structure of banks in Montenegro
    • Fig. 5. The ownership structure of banks in Croatia
    • Fig. 6. The ownership structure of banks in Macedonia
    • Fig. 7. The ownership structure of banks in Serbia
    • Fig. 8. Capital adequacy indicator of the banking sector of the Western Balkan countries
    • Fig. 9. Non-performing loans to total loans contribution trend of the Western Balkan countries
    • Fig. 10. Non-performing loans contribution to total loans of the Western Balkan countries
    • Fig. 11. Non-performing assets to total assets contribution trend of the Western Balkan countries
    • Fig. 12. Non-performing assets contribution to total assets of the Western Balkan countries
    • Fig. 13. Return on average assets of the Western Balkan countries
    • Fig. 14. The return on average assets of the Western Balkan countries
    • Fig. 15. Comparison of indicators of return on average assets of the banking sector of Bosnia and Herzegovina and the banking sectors of other Western Balkans countries
    • Fig. 16. Indicators of return on average equity of the Western Balkan countries
    • Fig. 17. Liquid assets to total assets trend of the Western Balkan countries
    • Fig. 18. Liquid assets to short-term financial obligations trend of the Western Balkan countries
    • Table 1. The Ownership structure of the share capital of banks in Bosnia and Herzegovina