Third, a large exposure regime applied to sovereign bonds would prevent banks from being overexposed to a single borrower. Related to that, the fourth last benefit, and this is of high importance to me as a banking supervisor – a sovereign debt restructuring would not any longer harm the whole financial system of a nation state and beyond.
•  The banks can say that these reserve requirements do impose a cost on them. My point is that the cost the CBBH imposes on you is less than the central banks in the neighboring countries impose on their banks so it is not an explanation for the cost of capital being higher in BiH.