The Financial Sector Assessment Program (FSAP) update team found that the authorities have progressed in implementing the key recommendations from the initial assessment. The 2005 FSAP team revealed a number of vulnerabilities, including (i) high credit growth, largely financed by foreign banks,...

Nonperforming Loans (NPLs) in the banking system constituted 16.5 percent of total loans, owing primarily to the corporate sector. The Credit Bureau, maintained by the Association of Serbian Banks, also discloses dramatic increases in corporate and retail defaults over the past year. NPL...

This note focuses on the deposit insurance scheme. An analysis of the Deposit Insurance Agency (DIA) is provided to the extent that it is relevant to the management of the deposit insurance scheme and no detail analysis of the other functions performed by the DIA, e.g. bank resolution, is...

In light of the outflow of deposits in Serbia in late 2008 and early 2009, a series of measures were introduced to urgently address stability concerns. These measures included increased deposit insurance coverage, shortened payout periods, introduction of regulations on lenders of last report...

This 2010 Article IV Consultation highlights that the authorities’ adjustment program has contributed to limiting the fallout of the global crisis on Serbia. Although the output slump has been limited relative to regional peers, the decline in domestic demand has been significant, resulting in...

The fifth review of Serbia’s economic performance under the program supported by a Stand-By Arrangement (SBA) is discussed. It helps in addressing the spillovers from the global financial crisis while establishing a moderate economic recovery. An accelerated pace of structural reforms will...

The Federal Republic of Yugoslavia is faced with the task of stabilizing and reviving a devastated economy after years of military conflicts, sanctions, and economic mismanagement. A weakened institutional capacity and the still evolving political situation is a cause for concern. A short-term...

This Technical Note reviews crisis management framework in Serbia. In light of the banking crisis in Serbia in late 2008 and early 2009, a series of measures were introduced to urgently address stability concerns. The report recommends that crisis management memoranda of understanding (MOUs) be...

This Technical Note reviews banking sector soundness and stress testing in Serbia. Serbia’s banking sector is well capitalized and liquid, but the corporate sector’s weak performance is a source of concern because of its adverse impact on nonperforming loans. Stress tests indicate that banks...