Effects of Establishing a Central Registry of Credits and Explicit Deposit Insurance in B&H on Certain Trends in the Domestic Banking

Promoting market discipline and protection of the credit system are the high priority tasks in creating the favorable conditions for the unimpeded flow of financial resources and preserving the stability of the financial system. One of the mechanisms that contribute to the establishment of market discipline is also a function of credit bureaus or Central Registry of Credits as an important determinant of business decisions.However, it remains a fact that the government's conscious needs a mechanism such as a Central Registry ofCredits and it is one of the most effective way of introduction of financial discipline. The aim of this paper is to analyze qualitative data from bank's interviews in order to assess how the introduction of Central Registry of Credits and explicit deposit insurance affects on market discipline as well as on certain trends in the domestic banking.The paper is divided into five chapters. Section 2 deals with the literature review. Section 3 contains an explanation of the Research Methodology. The findings and discussion were presented in section 4 while paper ends with conclusions in section 5. The results presented here imply the significant progress made by establishing a Central Registry of Credits in Bosnia and Herzegovina on certain trends in the domestic banking and the approximation of banking sector in Bosnia and Herzegovina to the developedcountries.