region. • government securities market : a draft law that will give a legal basis for this market is ready and hopefully will be introduced to parliament very soon. a lot of work has already been done on the infrastructure for this market. most of the elements already exist - registries, clearing and settlement systems - and the cbbh is getting financial and technical assistance from the us to establish a new issue facility. at a technical level i think we could be ready to issue the first short - term security as early as the first quarter of 2004 - provided the law is passed. this meeting should support the speedy introduction and passage of this law. • a leasing law has been drafted and will also hopefully be introduced to parliament soon. • one company has issued a company debenture ( i am not sure if this is the name you use in bih ) on the rs stock exchange. it is very small but it is the first example of a new capital raising instrument for enterprises in bih. reserve requirements : the final issue i want to comment on is the reserve requirements imposed by the cbbh. i am sure the banks here today will say this is one element in the high cost of capital in bih. before they do so, they should think about the following two facts : • the reserve requirement we impose, which is currently 7. 5 % and will rise to 10 % from 1 december, is much lower than in neighboring countries. i understand that the ratio is 19 % in croatia and 22 % in serbia for example. • the remuneration we pay banks on the reserve deposits at the cbbh, which is around 2 % on required reserves and 1 % on excess reserves, is quite generous compared with most other central banks in eastern europe. we are one of the few central banks to remunerate total reserve deposits. • the banks can say that these reserve requirements do impose a cost on them. my point is that the cost the cbbh imposes on you is less than the central banks in the neighboring countries impose on their banks so it is not an explanation for the cost of capital being higher in bih. conclusion : the banking system has improved significantly in bih and this has brought down the cost of capital. but there are further improvements that can be made. in particular, it is very important to accelerate the development of the capital markets in bih. the cbbh promises to continue to be actively involved in this process. but, the things that will do most to

senad softic : we will carefully monitor developments and possible changes media statement by mr senad softic, governor of the central bank of bosnia and herzegovina, on possible impacts of the euro introduction in croatia. statement issued on 7 august 2020. * * * the central bank of bh does not expect major challenges related to the introduction of the euro in croatia, said the governor of the central bank of bh he said that the foreign exchange risk in transactions with croatia will remain insignificant, as long as the currency board regime is in force in bh, or until bh introduces the euro. how much will the adoption of the euro in croatia, sooner or later, have an impact on bosnia and herzegovina, given the border connections and the turnover that still exists? we do not expect major challenges regarding the introduction of the euro in croatia. on the contrary. the exchange rate regime in force in croatia is a managed fluctuating exchange rate. the fact that croatia is in erm ii means, among other things, that the cnb has successfully maintained the exchange rate of the kuna against the euro in a certain narrow spread. therefore, fluctuations in the exchange rate of the kuna against the euro, and consequently against the km, were not strong. this means that foreign exchange risk in the financial system and the real sector, from this aspect, was not emphasized. with the introduction of the euro, foreign exchange risk in transactions with croatia will become negligible, as long as the currency board regime is in place in bh, or until bh introduces the euro. therefore, when croatia introduces the euro, the risks of doing business with croatia will be lower because the foreign exchange risk of changes in the value of the kuna against the euro will be eliminated. also, exchange operations ( currency exchange operations ) will be simpler because the same money will be used in 17 other countries. it is possible that in the medium term, the croatian economy will become more integrated and turn to countries that have the euro. but i repeat, there should be no major challenges. the cbbh will monitor the developments very carefully and take measures in time, if necessary. 1 / 1 bis central bankers'speeches