Abstract

The purpose of this assignment is to describe situation on Bosnian and Herzegovinian financial market, especially describing the period after the global financial crisis affected world’s economy and consequently economic environment of Bosnia and Herzegovina. Emphasize is on describing the external form of companies financing in Bosnia and Herzegovina in such conditions. The business environment in BH is probably the most unfriendly in the region, together with large and complex public administration and layers of administrative approval authorities. Characteristics of last sixteen years for BH were: war and post war crises, transition, badly implemented and unfinished privatization, globalization, increased competition and decline in production, employment and failure of a large number of enterprises. In this confusing period, the roll of BH companies, especially SME’s was very important because development of SME’s sector is contributing to economic grow, changing the economic structure and generating new employment. Complications related to authorizations and approvals needed, overlapping competencies and lack of harmonization among state and entity level laws give rise to the increased costs and risks of doing business. Companies in BH usually use resources provided by banks, regarding the fact that capital market, especially money market is not yet developed enough in BH. There are no innovative financial instruments companies could use for financing their business activities, and of those alternatives used by some companies, such as financing through initial public offering or issuing bonds, other companies are finding reasons in global financial crises and avoiding to skip bank loans rather than finding alternative way of financing. Capital market is regulated and organized in two capital markets in BH, one is capital market of Federation, and the other one is capital market of Republic of Srpska. Accordingly, securities are also traded separately, on SASE and BLSE. This is obvious sign that BH is a country in transition where the political situation after Dayton Peace Agreement is, among other things, complicating the opportunity for economic development of the country. …víceméně