EFFECTS OF FINANCIAL CRISIS ON BANKING SECTOR STABILITY IN BOSNIA AND HERZEGOVINA

Financial system of Bosnia and Herzegovina is bank dominated system. Banks have important role for stability of financial system and national economy. Having in mind specific features of financial systems we will analyze major characteristic of banking sectors and their behaviour in financial crisis and after. Bank’s stability and managing it in condition of financial crises has requested continues review of financial stability indicators for banking sector and possible sources of instability. Authors in this paper will analyze banks assets and quality of assets, capital, profitability and liquidity. Relation between commercial banks and central bank Bosnia and Herzegovina and limits on monetary policy also will be of interest in this paper.