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English   Srpski  Publishing Activities > Bankarstvo Journal > 2017 > 3 2017

Magazine "Bankarstvo" issue 3 2017

In this issue

Editorial

Original scientific paper

  • Svetlana Popović, Irena Janković, Velimir Lukić
    INTERCONNECTEDNESS BETWEEN SHADOW AND TRADITIONAL BANKING SYSTEMS IN EUROPE
    doi: 10.5937/bankarstvo1703014P
  • Summary: The financial crisis that emerged in the US quickly spread across Europe, causing a severe banking and sovereign debt crisis. That revealed the importance of short-term financing for traditional banks, which increased their exposure to the financial conditions on the interbank market. Financial innovations, especially the securitization process led to the growing importance of different institutions within the shadow banking system - which undergo a credit, liquidity and maturity transformation, without accessing the central bank liquidity or other forms of guarantees. The European banks had an active role in the US securitization process, but also securitized the products from the European market. The authors used the available data from the ECB statistics on shadow bank entities, broadly and narrowly defined, in order to analyze the various measures of interconnectedness between the shadow and traditional banking systems. The analysis showed that non-regulated financial institutions pose severe systemic risks, not just because of their size, but also due to the strong web of interconnectedness with the regulated banking sector.

    Keywords: shadow banking system, traditional banking, interconnectedness, systemic risk, exposure, financial intermediation

    JEL: G21, G23, G32

Original scientific paper

  • Milan Brković
    IFRS 9 IMPLEMENTATION IN BANKS AND MACROECONOMIC SCENARIOS - SOME METHODOLOGICAL ASPECTS
    doi: 10.5937/bankarstvo1703036B
  • Summary: The International Financial Reporting Standard 9 - IFRS is another one in the series of global level initiatives undertaken with a view to fixing the consequences of the global economic and financial crisis, and preventing the future negative developments caused by inadequate recognition and presentation of credit losses on the part of banks. The IFRS 9 also represents a significant shift in relation to traditional accounting, given that it introduced the concept of expected credit losses to replace the concept of occurred credit losses. This task cannot be fulfilled by the traditional and conservative accounting without involving the macroeconomic assessment models, i.e. macroeconomic scenarios. This paper aims to highlight some specific methodological rudiments in macroeconomic analyses and forecasts as inputs for the accounting recognition and presentation of expected credit losses.

    Keywords: IFRS 9, macroeconomic scenario, expected credit loss

    JEL: F42, G21, M41

Original scientific paper

  • Almir Alihodžić
    DETERMINANTS OF MARKET PRICES OF SHARES ON THE CAPITAL MARKET OF BOSNIA AND HERZEGOVINA
    doi: 10.5937/bankarstvo1703052A
  • Summary: Stock markets are efficient if the prices at any time reflect all publicly available information. Share prices should be adjusted at those points when investors try to take advantage of the new information that was not subject to accounting recognition. The main goal of this paper will be to determine whether the financial statements of a selected group of companies listed on the Sarajevo and Banja Luka Stock Exchange represent a good basis and reflect the market price or simply follow the legal obligations and requirements by regulatory agencies. The paper is based on the regression analysis of dependent and independent variables in the period from 2011 to 2015. The dependent variable will be the closing trading price on the stock exchanges, whereas the independent variables will be: the market price and earnings (PE) ratio, earnings per share (EPS), net profit after tax (NP), return on equity (ROE), the market and book value (PB) ratio, and the total turnover on the stock exchanges (TR).

    Keywords: market volatility, frontier market, closing price, turnover

    JEL: G10, G12, G14

Original scientific paper

  • Putica Maja
    CHANGES IN CORPORATE PROFIT TAX IN SWITZERLAND DUE TO THE EU TAX REFORM
    doi: 10.5937/bankarstvo1703074P
  • Summary: Tax reforms concerning corporate profit are an inevitable phenomenon in the 21st century with the unfair tax competition among countries going rampant. Although not a member of the European Union, Switzerland is affected by these measures, since it is one of the leading economies in the world which profits the most from preferential tax regimes. For the purposes of this study we analyzed the current changes in the tax treatment of corporate profit at all three levels of government in Switzerland which occur due to the Corporate Tax Reform. The paper points to the basic features of the system of corporate taxation in Switzerland in order to understand the changes that followed and the reasons justifying the change in terms of the European Union and the OECD. Accordingly, we propose several key measures that could contribute to the implementation of reforms - for the cantons to accept the international rules or to lower the tax rates on corporate profit to the level of international competitiveness. Aligning the cantonal tax rates has been underway, and in the forthcoming period a referendum is expected to take place with a view to defining further steps in accepting the tax rules. In case that the tax reform III fails, new reforms will be inevitable.

    Keywords: Switzerland, corporate profit tax, tax reform, European Union, changes in corporate profit tax, CTR III

    JEL: H25, H71

Scientific review article

  • Radovan Kovačević
    FINANCING THE CURRENT ACCOUNT DEFICIT IN SOUTHEASTERN EUROPEAN COUNTRIES
    doi: 10.5937/bankarstvo1703096K
  • Summary: The inflows of foreign capital to the Southeastern Europe (SEE) countries before the outbreak of the global financial crisis in 2008 supported the growth of domestic demand, which was partially satisfied by imports. This conditioned the growth of the current account (CA) deficit. The liberalization of foreign trade has facilitated imports and contributed to the growth of the trade deficit. The capital inflows into these countries have been increased as a result of the low interest rates as well as the increased amounts of available global liquidity. Strong domestic demand has generated high rates of economic growth. However, a significant increase in prices and wages, primarily due to the expected convergence of income, weakened the sector of tradable goods in these countries. The result has been a high increase in external debt, which could adversely affect debt servicing capacities, and weaken the competitiveness of the economy. The mitigating circumstance for these countries is the significant net inflow of foreign direct investment (FDI), as an important channel of financing the CA deficit. The countries of the region have made adjustments after the outbreak of the global economic and financial crisis, with the accompanying reduction in the CA deficit. However, the main direction for financing a sustainable CA deficit is to increase export competitiveness and export revenues. In this way, the trade deficit would be reduced, and the CA deficit may become sustainable. The FDI net inflow is an additional source of financing the deficit, which mitigates the burden of external indebtedness. However, even with this type of capital inflow, one must bear in mind the possibility of repatriation of profit and, eventually, withdrawal of capital, which could make it difficult to finance the CA deficit.

    Keywords: current account, external debt, Southeastern Europe, foreign direct investment, trade openness, remittances, investments, exports, trade balance

    JEL: F21, F24, F32, F34, F39

Scientific review article

  • Slađana Sredojević
    TRIPLE E - EXAMPLE OF THE EUROPEAN QUALIFICATIONS QUALITY ACCREDITATION IN BANKING
    doi: 10.5937/bankarstvo1703112S
  • Summary: In order for professional qualifications to best serve their purpose and usability, for the benefit of an individual and a bank, it is very important that each of them has a certain quality standard. The standard is actually an indicator that the qualification has been designed, implemented and evaluated in a very determined and quality manner. The paper deals with the analysis of current standards of professional qualifications established in the banking sector through the example of the Triple E standard developed by the European Banking Training Network with the support of the European Commission, which refers to the three existing lifelong learning tools in the EU. Through these three frameworks to which all Triple E qualifications refer, the standard will contribute to the greater transparency in the education systems of the European Union countries, which will increase the quality and international mobility of individuals, as well as restore confidence in people and the organization of the sector.

    Keywords: qualification, financial services sector, competences, training, education, accreditation, banking sector

    JEL: I21, J24, J50, O15

Scientific review article

  • Svetlana Pantelić
    DINAR-CROWN BANKNOTES
    doi: 10.5937/bankarstvo1703130P
  • Summary: Dinar-crown banknotes were: ½ dinars (i.e. 2 crowns), 1 dinar (i.e. 4 crowns), 5 dinars (i.e. 20 crowns), 10 dinars (i.e. 40 crowns), 20 dinars (i.e. 80 crowns), 100 dinars (i.e. 400 crowns), and 1000 dinars (i.e. 4000 crowns). The ½- and 1-dinar banknotes are assumed to have been issued in 1919, whereas the other five banknotes, according to one source, were released into circulation on 21.02.1920. Pursuant to the regulations, the replacement of the nostrified crown banknotes by the new crown-dinar banknotes started on 3 February 1920 in Serbia and Montenegro and on 16 February 1920 in other parts of the country.

    All seven denominations of the dinar-crown banknotes were being withdrawn from circulation throughout a lengthy period of time from 21 February 1921 until May 1934. The first to be withdrawn were the 20-dinar banknotes, from 1 February to 30 April 1921, then the 5-dinar banknotes, from 20 July to 20 November 1922, and the 10-dinar banknotes, from 10 February to 10 June 1924. The 100-dinar (400-crown) and 1000-dinar (4000-crown) banknotes remained in circulation the longest. The withdrawal of the 100- and 1000-dinar banknotes started in 1929 and lasted until 25 May 1934.

    The 1924 rulebook on minting coins of ½, 1 and 2 dinars precisely defines their withdrawal from circulation and replacement by minted coins within one year after the last batch of minted coins gets released into circulation. However, in 1927 the decree of the Minister of Finance prescribed that the remaining paper banknotes be withdrawn from circulation on 30 September 1927 by being replaced by the metal coins of the same denominations.

    Keywords: dinar-crown banknotes, ½ dinars, 2 crowns, 1 dinar, 4 crowns, 5 dinars, 20 crowns, 10 dinars, 40 crowns, 20 dinars, 80 crowns, 100 dinars, 400 crowns, 1000 dinars, 4000 crowns, National Bank of the Kingdom of Serbs, Croats and Slovenes, circulation, stamping, labeling

    JEL: E42, N14

Expert article

  • Vesna Matić
    BANKING RISK 55: IRRBB - INTEREST RATE RISK IN THE BANKING BOOK
    doi: 10.5937/bankarstvo1703142M
  • Summary: The Basel Committee on Banking Supervision published the standard on interest rate risk in the banking book (IRRBB) in 2016, which includes the detailed standardized framework for measuring the IRRBB. The framework enables banks to calculate the economic value of equity (EVE) for the IRRBB.

    Keywords: interest rate risk, banking book, standardized framework, economic value of equity

    JEL: F38, G32

Book review

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