Establishing ethics compliance
for the banking sector in
Bosnia and Herzegovina
» Transitional and integration processes toward the European Union give specific challenges to each transitional country.
» The banking sector has had its development in Bosnia and Herzegovina and has reached the point where it has higher
standards of regulation than the country itself.
» The Compliance function has been introduced formally in the banking sector via new regulatory framework.
» Ethics compliance is a completely new approach and challenge in Bosnia and Herzegovina, which will help the path of
development for the banking sector in general.
» Institutional support by state bodies will be conditio sine qua non for establishing ethics compliance.
Transitional countries face the full package of challenges in regula- tory framework, especially the
banking and financial sector in general.
Post-crisis period — after 2007, 2008, and
2009 — financial stress brought us many new
rules for financial stability, which
represent a new road of protection for all institutions in case of
similar financial disturbances.
Furthermore, countries in transi-
tion — and those that deal with
the European Union (EU) and
NATO — have to face additional
steps in order to provide a stable economy,
a stable market, financial security, and law
enforcement. Due to its specific legal and
social situation, Bosnia and Herzegovina
(BiH) can serve as a case of how just one
segment — compliance in financial institu-
tions — can find its way in order to serve to
the community itself and to help develop
banks as a business in general. That is the
aim of this article.
The new regulatory framework in the
banking sector of BiH — established by the
Federal Banking Act1 and the Banking Act
of Republic of Srpska2, along with bylaws
adopted by banking regulators and banking
agencies — has formalized the Compliance
function more than ever before.
Banking acts in BiH have identically
defined the Compliance function as a control
function in banks together with the Risk
Management function and the Internal
Audit function. Legal prerogatives of this
· Following the compliance of the bank’s
business with the Banking Act, bylaws
of the agency, and other regulations and
standards of cautious banking, anti-money laundering, and counterterrorist
financing procedures, as well other acts
which define the banking business;
Mujo Vilašević ( firstname.lastname@example.org) is a Regulatory
Compliance Associate at Sparkasse Bank dd BiH in Sarajevo, Bosnia.
by Mujo Vilašević