Basel II

Pursuant to the Law on the National Bank of Serbia, in addition to the main objective - to achieve and maintain price stability, the goal of the National Bank of Serbia is to maintain financial stability.

Banking sector is the largest and the most significant part of the financial system of Serbia. Considering the significance of banking operations and supervision in the context of maintaining financial system stability and, indirectly, economy as a whole, the National Bank of Serbia continuously performs activities to improve the regulatory framework for further improvement of the stability and harmonization with international principles and standards in the area of banking operations and supervision. For that purpose, and in accordance with recommendations of the Basel Committee on Banking Supervision (BCBS), in the October 2007 the National Bank of Serbia has commenced the process of introducing Basel II standards in Serbia. Namely, the BCBS encourages implementation of Basel II standards by supervisors from countries worldwide, but within a time frame that the supervisors themselves consider as optimal, or consistent with their supervisory priorities.

The main goals of introducing Basel II standards in Serbia are:

• Further strengthening of stability of the banking sector and financial system; 
• Improvement of risk management process in banks and risk-based supervision process; 
• Enhancement of transparency and market discipline;
• Alignment with operating conditions in the international financial market;
• Harmonization with EU regulations - EU Directives 48/2006 and 49/2006;
• Strengthening the link between capital requirements and risk exposure in banks.

In accordance with the Strategy for the Implementation of Basel II standards and Activity Plan (more information within the National Implementation), the full implementation of Basel II standards is planned to begin on January 1, 2011.

Implementation of Basel II standards in Serbia is a transparent process. All relevant information regarding this process will be available on the NBS website.