become a candidate country soon. joining the eu will most probably be a long process, as nobody expects see countries to become the eu members before 2025. since 1997, the cbbh has been operating the currency board arrangement, under very strict criteria. our currency, the convertible mark ( bam ) was pegged to the deutsche mark and then, to euro, after its introduction. in addition, supervision of banks is not in the cbbh mandate, but nested in two separate banking agencies. there are certain stands that operating under currency board arrangement means we have no independent monetary policy or exchange rate policy. at a surface it might seem true. but, we are far more 2 of 7 than a „ big exchange office ”, as some call us. in other words, operating under currency board regime does not mean that the cbbh does not play an important role in this process of joining the eu and euro area and in monetary policy itself. and this has not changed with the gfc, i. e. we still have limited powers to stabilize the economy. so, we might be one of rare institutions that have not changed way we operate due to the gfc. let me remind you that we have some important instruments at our disposal and we do our best to use them efficiently on bh's way to the eu, including firstly reserve requirement ; the cbbh is in charge of regulating reserve requirement imposed on commercial banks. we used it actively in the past, especially after the gfc, boosting the liquidity in the system. furthermore, we amended the decision on required reserves also in order to harmonize with the ecb policies. when ecb increased its „ penalty ” on banks overnight deposits in march 2016, as part of non - conventional monetary policy measures, we almost immediately introduced negative interest rates on excess liquidity that commercial banks hold with us. currently, we charge - 0. 2 %, i. e. 50 % of the ecb overnight deposit rate. we will continue to follow trends in the euro area and in our economy and use our decision on reserve requirement and excess reserves in the future, as well. secondly, the cbbh is in charge of the overall payment system in bh. we constantly improve it, adhering to the sepa ( single european payment area ) and the psd2 ( payment system directive 2 ). as you know, changes in payment systems are dynamic and we are ready to continue building a robust and resilient payment

, there is a lot of work to be done to resolve issues from the past financial crisis. at more than 11 percent of total loans, npls continue to burden the balance sheets of banks. in this respect, adoption of new bankruptcy legislation at the entity level and clarification of tax - treatment of npl sales will help address this issue in the period ahead. 3. third, we should redouble our efforts to improve our institutions and address governance shortcomings. foreign direct investment is stuck at around two percent of gdp per year. this is too low to support higher growth rates that will reduce unemployment and emigration. improvements in regulatory quality, fair and transparent ‘ rules of the game ’, and transparent and accountable institutions will help attract higher levels of foreign investment. therefore, we have to send clear message about positive outcomes of our reforms, increase reputation of bosnia and herzegovina, improve our competitiveness to increase investments and growth, and at the same time strengthen the single economic space to finally pave the way to our european future. thank you very much for your time, and i hope that you have a wonderful event.