This paper examines the key macroeconomic factors of non-performing loans (NPLs) in the banking sector of Bosnia and Herzegovina. The research is conducted on quarterly time series data within the period from 2005 to 2019. The autoregressive distributed lag (ARDL) approach is used to model the long-run and short-run relationship between macroeconomic time series. The research results show that increase in real GDP is associated with decrease in NPLs, while rising unemployment and consumer prices are correlated with higher levels of NPLs at 5% significance level.
Stabile and functional financial sector is important part for stability and development of national economy. Having on mind specific features of financial system in Bosnia and Herzegovina as bank dominated financial sector we will analyse changes in structure of financial sector and behaviour of major sector in financial system in the period from 2005 to 2017. Changes in financial sector in Bosnia and Herzegovina have been analyzed through a series of indicators for major part of financial sector banking and non-banking financial entities. Also, authors will analyses changes which are made in institutional framework for bank and non-bank financial entities towards integration in the EU financial sector.
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