RESPONSES OF BOSNIA AND HERZEGOVINA FINANCIAL SECTOR TO FINANCIAL CRISIS AND RECESION

RESPONSES OF BOSNIA AND HERZEGOVINA FINANCIAL SECTOR TO FINANCIAL CRISIS AND RECESION

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The paper deals with economic and financial crisis that spilled over from trading partners into Bosnia and Herzegovina.The key issue is how financial sector of the country responds to the current crisis and what measures are taken in domestic financial High‑voltage power supply sphere to mitigate the negative effects of the crisis.Attention is focused on the banking sector and macroeconomic financial policies.As the monetary system in BiH is very rigid because it is based on the currency board with a fixed exchange rate, the most powerful instrument of economic policy remains fiscal policy.A threat Pantiliners to the recovery from crises is external imbalances, very high unemployment rates and problems in the banking system that can escalate to a certain time lag.