Conference paper
REASONS FOR THE INCAPABILITY OF BANKS IN BOSNIA AND HERZEGOVINA TO COLLECT PAST DUE RECEIVABLES
Dara Ljubić
; Department of Economics and Business Economics, University of Dubrovnik, Dubrovnik
Ivan Ljubić
Tea Miloslavić
; Department of Economics and Business Economics, University of Dubrovnik, Dubrovnik
Abstract
The basic idea of research is order to answer questions about the number and characteristics of problems with claims collection and risk management of claims collection. Research was done at thirty-two commercial banks in B&H (twenty-three having head office in FB&H and nine in RS). The current economic crisis and recession are affecting most countries and their economies; they wish to overcome it as soon as possible and with the fewest consequences. Problems with uncollected claims arise at the beginnings of a crisis; they announce the crisis and deepen it strongly. From this point of view, it can be said that uncollected claims are, at the same time, the cause and the consequence of economic crisis and stagnation. Uncollected claims issues exist in every country, in all economic systems and at any given time. The only variable is their extent and intensity. In Bosnia and Herzegovina, these problems are more visible than in other countries for many reasons and circumstances because there are no appropriate mechanisms for their removal. Moreover, the government authorities are not making an effort to implement certain measures to change and improve the present situation. The most obvious example of this are companies that exist, function and do business although they have not paid notes payable for months (or years); they are illiquid and because of them creditors cannot collect their claims. In this way, banking is also threatened. In some cases even instruments for ensuring collection of claims are of no use, and what is more, the legal system does not function properly so uncollected claims cannot even be collected by court proceedings. The reasons why banks in B&H cannot collect past due receivables are not only the consequence of economic crisis but are also caused by other reasons and different circumstances. The basic problem is that uncollected claims are not managed efficiently, that the legal state does not function, that the laws are not enforced, that legal regulations are not appropriate and that there are illiquid companies on the market as well as those which otherwise would not operate in a developed economy.
Keywords
risks of claims collection; instruments for collection of claims and instruments for ensuring collection of claims; risk management of claims collection
Hrčak ID:
161584
URI
Publication date:
1.10.2015.
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