Membership and relations of BiH with the international financial institutions (IFIs) General information on international financial institutions International financial institutions (IFI) represent countries of the world and their cooperation in terms of international financial relations. International financial relations basically represent financial aspect of international trade. Therefore, international financial system (or international financial architecture, as it was named in 1990s) encompasses rules, regulations, and conventions that regulate financial relations between countries, as well as IFIs, which represent an important element of international financial system/architecture, exist with one main purpose - to ensure free (unrestricted) international trade and capital flows. Other purposes of international financial cooperation concern continuous growth of world economy which includes increased employment and standard of living, real income growth, and efficient use of production resources. At the mention of IFI, especially from the point of view of any central bank of the world, the first thing that comes to mind is that it includes two well known institutions: the International Monetary Fund and the World Bank. These two institutions were formed at the International Conference held in Breton Woods in 1944, and are usually referred to as the Breton Woods Institutions. The Breton Woods Institutions were namely established in order to regulate international monetary system after the war (competence of the IMF) and to reconstruct devastated economy after the WWII (formerly under competence of the International Bank for Development and Reconstruction; presently, one of five institutions forming the World Bank Group). International monetary system established back at that time was called the Breton Woods System (system of fixed currency exchange rates with an obligation of central banks to intervene and maintain the fixed parity), and it was in force until 1971. At the moment of establishing, around 30 countries were members of the Breton Woods Institutions, while today, the IMF and the World Bank are global institutions representing international financial cooperation of almost all countries of the world. Apart from global IFIs, certain groups of countries cooperate in international financial institutions according to the principle of related interests in the region, or the principle of specific shared purpose. Examples of these are: the European Bank for Reconstruction and Development, the Bank for International Settlements established in 1930, the European Investment Bank, etc. Member countries of the aforementioned two IFIs have to deposit (or guarantee to make a payment on call) certain amount of assets according to the rules of IFIs defined by the statute or some other document defining basic rights and responsibilities of membership. The funds deposited by the members represent general source of funds (or paid-in capital) of each IFI. Funds provided in this manner are usually not sufficient to ensure financial assistance to the members, so IFIs provide additional funds by making calls for payments based on decisions on increase in the amount of general funds, or by taking loans from financial markets by issuing securities. Having in mind that, since the 1970s, forty years of modern international financial system/architecture were marked by two phenomena - globalisation and crises, other forms of international financial cooperation emerged, such as different forums, associations and committees organised by certain groups of countries. At meetings of these groups, associations or committees, decisions are made that significantly affect international financial system, especially regulatory framework, but also very IFIs, particularly the IMF. In that context, there are some famous examples of this form of cooperation: G-7 group of the most developed countries of the world, or G-20, a group that became the main economic forum after the outbreak of the global economic crisis in 2008; specific association such as the Organisation for Economic Cooperation and Development (OECD) or the Paris Club; various committees, such as the International Monetary and Financial Committee (IMFC) or the Financial Stability Board (FSB). Bosnia and Herzegovina (BiH) inherited membership in the Breton Woods Institutions and the Bank for International Settlements as one of the five countries that came out of the Socialist Federal Republic of Yugoslavia (SFRY). SFRY was a member of the Breton Woods Institutions from the very beginning. The Central Bank of Bosnia and Herzegovina (CBBiH) is a depository for the Breton Woods Institutions, and since 2002, it is a fiscal agent for the membership of BiH in the IMF. Bosnia and Herzegovina is a member of the European Bank for Reconstruction and Development and the European Investment Bank. In all of the aforementioned institutions, BiH has partially inherited and subsequently paid or deposited all necessary guarantees for paying its share of funds in general sources of funds for these IFIs. In terms of financial position of BiH in these IFIs, BiH has been in debt (meaning it is a beneficiary of a loan in amount exceeding its share in total sources of funds), neutral (not using funds), or with a zero status (uses funds in amount equal to its share in total sources of funds). Under this topic, you may find further information in international financial institutions in which BiH is member, as well as the most relevant information on relations between BiH and these institutions; information is available in three official languages in BiH, and are based on the relevant texts in English which may be accessed via links to appropriate IFI. World Bank Relations IMF Relations Announcements Standard & Poor's Affirmed the Credit Rating of Bosnia and Herzegovina Moody's Affirmed Credit Rating of Bosnia and Herzegovina Standard&Poor’s Confirmed Credit Rating of BH Standard&Poor’s Affirmed the Credit Rating of Bosnia and Herzegovina Standard&Poor's Confirmed Credit Rating of Bosnia and Herzegovina Standard&Poor's - Credit Rating on Bosnia and Herzegovina Affirmed Standard&Poor's - Credit Ratings On Bosnia And Herzegovina Affirmed Funds of the Stand-By Arrangement Transferred Credit Rating of Bosnia and Herzegovina Remains the Same, With Stable Outlook Standard&Poor's – credit ratings affirmed, outlook improved MOODY'S – BH Maintained the Credit Rating Rating On Bosnia And Herzegovina Lowered Moody's Has Changed BH Outlook Within Credit Rating Bosnia and Herzegovina Maintained Credit Rating Funds From The Stand By Arrangement Disbursed Standard And Poor's Published The Annual Report On Credit Rating Of BH For 2009 Funds From The Stand By Arrangement Disbursed MOODY'S Annual Report on BH: No Changes Of Credit Rating Standard & Poor's: Credit Rating on BH Remains the Same The SDR Funds allocatted by International Monetary Fund Funds of the First Tranche of the New Stand-By Arrangement Disbursed Credit Rating of Bosnia and Herzegovina Remains Stable Better Credit Rating to BH BH credit rating confirmed – B2 with stable outlook
