An efficient banking system is a crucial part of market economy. It encourages savings and it promotes investment and employment by lending those savings for business development, housing and other purposes. The year 2000 will be seen as the year in which the banking sector in BH finally began to change for the better. I will mention just a few of the highlights.
First, the payments system underwent fundamental reform. BH now has a modern European-type payments system. Second, minimum capital requirements for banks were increased and will increase further. Third, it become possible for a bank registered in one entity to operate branches in the other entity. Five banks are already doing so, and more will follow.