Council for Capital Market of BH Supports the Establishment of a Single Market of Government Securities in BH

Recently founded Council for Capital Market of Bosnia and Herzegovina on its second session held on July 8 in the premises of the CBBH in Sarajevo supported the establishment of a single market of government securities, where the state of BH shall be the single issuer, on its behalf, and on behalf of entities and District Brcko, with the Central Bank of BH that would run the auctions for issuing government securities.
This new concept of government securities' capital market and the state debt is the essence of the new draft Law on the internal debt and state guarantees that was presented at the session. Because of its importance, the Council recommended that the Law to be sent to Parliamentary procedure as soon as possible.
At the agenda of the Council there was also a draft Law on Securities in Brčko District, which would regulate issuance of securities in the District. The Council reminded District authorities on the need to have a single and modern developed capital market and benefits that the BH could have from capital and securities market integrated throughout the country. Therefore the Council urge the District Brcko authorities to adjust their regulation with existing laws on the state and entities level in the field of capital and securities market. They also recommended to the Brčko representatives that they exclude provisions from the Draft Law that would allow the District to establish a third stock exchange in the country.
The position of the Council is that a small economy such as BH cannot afford itself to have the two stock exchanges that already exist, and further fragmentation of the capital market presents destructive and reversed process to modern development and reforms in the country.
The strategy for such further development of the capital market has also been presented to the members of the Council in the second draft of the PRSP (Developing Strategy for BH). The strategy was fully supported by members of the Council with additional suggestions that should be incorporated in the final version of the document. The Council believes that the strategy for development of the capital market in BH should be based exclusively on economic factors, for example to reach a decrease of financial services' costs through simplification of the regulatory infrastructure of the financial system in the country.
Apart from the members as Minister of finance and treasury of BH, representative of Federal ministry of finance, presidents of two entities securities commission, registers of securities, stock exchanges and representatives of banks, there were also guests participated as supervisor for District Brčko ambassador Henry Clark, expert from US Treasury Ann Schwartz and director of PRSP Zlatko Hurtić. The council will continue discussion on the strategy of further development of the capital market on its next session which will be held in Banja Luka.