|
Yugoslavia Banking
The banking sector was crucial to Yugoslavia's efforts to
constrain domestic demand, to shift resources toward exportproducing sectors, and to increase investment efficiency. Laws
introduced in 1985 effectively created a new banking system and
sought to bolster financial discipline, improve investment
selection, and strengthen the commercial banks.
Almost all financial assets and savings in Yugoslavia were
held in banks or kept in cash in the form of dinars or foreign
currency. The financial institutions within Yugoslavia included
the central banking system, which consisted of the National Bank
of Yugoslavia and the national banks of the six republics and two
autonomous provinces; the commercial banking system, including
166 basic banks and 9 associated banks; and other financial
institutions such as internal banks and the Yugoslav Bank for
International Economic Cooperation (YBIEC).
The central banking system was responsible for planning and
implementing monetary policies. But in the 1970s, the federalized
status of the National Bank limited its control over the
commercial banks and made it relatively powerless to carry out
national monetary policy. Because the credit policies of
commercial banks were relatively unchecked and because they were
organized on a republic basis, those banks were very powerful in
maintaining the serious imbalance of investment and development
among the regions of Yugoslavia. The reforms of January 1990,
however, gave the National Bank more control over the operations
and policies of commercial banks.
Day-to-day commercial banking activities were carried on by
the self-managed business or basic banks. They were local or
regional organizations that were nominally controlled by their
founding local enterprises or communities of interest. In
reality, because bank managers were politically appointed, they
were heavily influenced by local party and government
organizations. Two or more basic banks could form an associated
bank through a self-management agreement. The major functions of
associated banks were to pool resources and handle foreign
exchange operations on behalf of their member basic banks.
Banks, enterprises, and other financial organizations were
audited by the Social Accounting Service. All banks were required
to be members of the Association of Yugoslav Banks (YBA). The
function of the YBA was to initiate and organize cooperation
among member banks through self-management agreements. A typical
agreement of this type established uniform interest rates on
deposits for all Yugoslav savings banks.
Internal banks were financial service organizations
established through self-management agreements among basic
organizations of associated labor. Not considered financial
institutions per se and not subject to monetary regulation,
internal banks were important as a cooperative source of funding
to facilitate investment of their member basic organizations.
Only member basic organizations and their workers were allowed to
deposit in internal banks.
The Yugoslav Bank for International Economic Cooperation
(YBIEC) was established in 1979 to provide financial support for
foreign transactions. Owned by over 300 major capital goods and
services exporters, YBIEC's main responsibility was to extend
noncommercial export credit and insurance to exporters and joint
ventures. In 1989 a new law transformed the organization into a
joint stock company and expanded its ownership to include state
and banking institutions. YBIEC received funding from its
members, basic and associated banks, the National Bank of
Yugoslavia, and foreign borrowing and issue of securities.
Data as of December 1990
|
