This morning, the Governor of the Central Bank of Bosnia and Herzegovina (CBBH), Senad Softić, Ph.D. opened the conference “The Economist: World in 2022” organized by Color Media Communications, in cooperation with the CBBH and with the support of the British Embassy in Bosnia and Herzegovina and the Delegation of the European Union to Bosnia and Herzegovina.
While opening the Conference, Governor Softić pointed out that in the year ahead there are numerous challenges in various fields of human activity, emphasizing the challenges facing the CBBH and the financial sector in BH and the economy as a whole.
The CBBH, as the Governor pointed out, has been successfully maintaining the principles of the Currency Board for almost 25 years, and the result of this is a stable domestic currency and constant growth of foreign exchange reserves. Even during the pandemic, which continues, the CBBH performed all its tasks properly, and very adherence to all principles in the corona crisis resulted in the fact that BH can count on the CBBH as a pillar of stability, not only economy, but society as a whole”, pointed out Governor Softić.
Speaking about the challenges facing the CBBH and the financial sector as a whole, Governor Softić mentioned the main trends that may concern the stability of the financial system as a whole. Aside the negative interest rates, the first challenges are cryptocurrencies, which are many in the world, and in the future it can be expected that they will be even more in number, with great variability in their prices. Furthermore, the challenge is exclusively digital banks, the so-called “neobanks”, i.e. commercial banks that do not have a physical headquarters, but operate virtually.
New payment systems and FINTECH represent new technological solutions in payment transactions making possible that payments among customers are carried out at low cost, fast and in real time and sometimes continuously 24/7. The progress of new payment technologies is expected to be particularly important for cross border payments. In the end, as a challenge, Governor mentioned decentralised finance, including such level of technology development making possible that a transaction of, for example, extending of a loan from one person to another can be carried out without bank mediation.
He particularly stressed the need for coordinated cooperation of all the relevant institutions in BH, believing that no institution by itself can open the EU door. However, all together, we can achieve a lot on that path, to the general benefit of all citizens.
„Future is always uncertain. We have seen that in the 2007 global financial crisis and in the ongoing COVID pandemic. It does not mean we need to be passive towards future. On the contrary, a large amount of uncertainty should make us be more resilient to future shocks. Because, they will certainly take place. There is an old rule in economic policy: “Always consider good news temporary, and bad news permanent“. It is not pessimism but reasonable caution and better preparation for future challenges“, Governor Softić concluded his speech at the conference.
The CBBH Vice Governor, Željko Marić, Ph.D. participated in the panel “ Money never sleeps: new chances and challenges for the economies of Bosnia and Herzegovina and southeast Europe region“.
The conference „The world in …“ was held in BH for the first time this year, gathering representatives of political, economic and social life, and diplomatic representatives in BH, with the aim to provide, through a constructive dialogue, analyses and views on economic and political environment, investment climate, and the development of society on the whole. The first annual, Bosnia and Herzegovina edition of prestigious British magazine „The Economist“ was promoted on this occasion.