SARAJEVO, Bosnia (October 10,2008) - An out of the ordinary increase of withdrawals caused a temporary cash shortage in several of the biggest Bosnian banks.Faced with this exceptional situation, even the Bosnian Central Bank struggled to cover banks’ increased demands for cash, Central Bank officials said on Friday, stressing that banks’ liquidity is not jeopardized.
“Our banks do not have problems with liquidity, they have enough resources in their reserves,” deputy governor of the Bosnian Central Bank, Tariha Imamovic, told media.
“The problem was of a technical nature, because it is impossible to have so much cash in such a short period of time.”
The problem started on Thursday afternoon, in several branches of Unicredit and Raiffeisen Bank in Sarajevo, where worried customers stood in long lines to withdraw their deposits. It is still unknown whether this situation has spread to other banks in other areas in the country.
The situation appeared to be calmer today, after the Bosnian Central Bank provided commercial banks with as much cash as was available and has ordered additional resources from its deposits kept abroad, which – if needed – will be available within the next couple of days, Imamovic stressed.
The brief cash crisis on Thursday, indicated the level of nervousness among the Bosnian citizens triggered by the deteriorating global economic crisis and the fact that most of Bosnia’s commercial banks are owned and directly linked with other European big banks.
Bosnian citizens have additional reasons for weariness since many of them lost most of their savings when the banking system of former Yugoslavia collapsed in the early 1990’s.
“There is no reason for panic,” Imamovic stressed.
Over the past few weeks, local and international financial and banking experts have repeatedly stressed that Bosnia’s financial and banking systems are safe from the global financial turmoil thanks to the strong reserves of Bosnia’s Central Bank, the modernised regulatory system of the country’s banking sector, state-guaranteed small deposits, the fixed exchange rate between Bosnian Mark and Euro, as well as a conservative fiscal system controlled by the country’s currency board.