Any banking activity involves a certain level of risk. Regardless of the fact that risk has always been present in banks, active risk management in conventional banking started only in the 1990s, specially after the collapse of Barings PLC, the bank with more than 200-year-old tradition, while such practice is still underdeveloped in Islamic (interest-free) banking whose practical implementation in the world started only in the 1970s. However, in the times of the recent sub-prime mortgage crisis and a large number of collapses and near collapses, multibillion losses and write-offs all banks, whether conventional or Islamic, saw the necessity for active risk management. Specific features of banks in Bosnia and Herzegovina and their way of managing risks are conditioned by a particular legal framework. This framework regulates primarily the conventional banks, but it indirectly affects the Islamic bank as well, since it does not allow the bank to offer all types of products and services which are generally present in Islamic banking. Since, to our knowledge, not a single specific comparative research into conventional and Islamic banks has been done in this part of the world, the aim of this paper is to provide an insight into risk management practiced by BiH banks, and to determine the dependence of their financial performance on the process of active risk management.
Contemporary international economic environment registers an increasing relationship and interdependence of countries regardless of the degree of their development. In the open economy, the development of foreign trade mainly implies the growth of gross domestic product (GDP). The basic goal of this paper is to examine the influence and effects of trade dependence on GDP. Trade dependence is used to describe a country for which exports and imports are very important. This coefficient also shows the degree of national economy openness. The analysis included the area of Bosnia and Herzegovina for the period 2010-2018, whereby the relevant statistical data were processed for export, import, GDP, as well as the selected coefficient of foreign trade dependence. The results showed the existence of a short-term or long-term relationship between GDP and the total export and import, as well as between GDP and export.
Over the recent decades, we have witnessed advanced processes of liberalization of capital flows, and increasing integration and globalization of financial markets. Along with the globalization trend, ever since the end of the 1980s, the process of financial integration has also been taking place, as a consequence of removing barriers to free movement of capital between countries. Therefore, this research explores financial integration of small open countries and aims to make conclusions on how this integration can affect their economic stability. Qualitative definitions of small countries point out that they typically have a limited territory, relatively small population and limited resources. The research hypothesis is postulated as follows: the economic stability index of small open countries is conditioned by their financial integration. The analysis includes small open countries of Southeast Europe observed from 2005 to 2020, with relevant statistical data used for the total inflow and outflow of investments, the share of assets and liabilities in gross domestic product and the calculated value of the economic stability index. The analysis was made using the methods of correlation analysis and correlation test. The results show that there is a correlation between financial integration and the economic stability index in small open countries.
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