Current Problems and Issues Affecting the Development of Capital Market in Bosnia and Herzegovina Retrospective and Real Opportunities

Abstract

The picture of the capital market and financial sectors of B&H is still relatively unfavorable. In comparison with the advanced transition economies, capital market in B&H is underdeveloped and less important to the domestic economy in general and to corporate finance in particular. The focus of this paper is to analyze and examine the trends in capital market in B&H with the assessments and perspectives of its development in the future. In order to understand better the functioning of the financial system and its workings the paper discusses some general aspects of the financial system and its impact on economic development of national economies, and provides a brief overview of developments in the banking sector of the countries of former Yugoslavia. The analysis is then directed to review developments in the financial sector of B&H, their direct links with the capital market, followed by analysis of current events and the dynamics of trading as well as capital markets activities in B&H.