a "Western market system" for Kosovo

Louis Proyect lnp3 at SPAMpanix.com
Thu Nov 18 09:29:54 MST 1999



Author: Reuters (US)
Publisher/Date: November 16, 1999
Title: UN takes steps to establish 'Western market system' in Kosovo

PRISTINA, Nov 16 (Reuters) - Kosovo's international administration
announced the first steps on Wednesday towards setting up a banking
system, intended to lay the groundwork for efforts to revitalise the
territory's ruined economy.

The administration said it was creating a body with many of the powers
of a central bank, although it will not be able to issue its own
currency, and was inviting applications from commercial banks wishing to
operate in the province.

The new body, the Banking and Payments Authority of Kosovo (BPK), will
act as a banker to the United Nations-led Kosovo administration and also
supervise the banking sector.

``I know that the history of banking in this region has been fraught
with painful experiences, often resulting in huge financial losses. This
must not happen again,´´ Nick Brentnall, the managing director of
the new authority, told a news briefing.

``With BPK, we now have the opportunity to build a new banking system --
a sound, honest system, a banking system in which the people of Kosovo
can place their trust,´´ he said.

Many Kosovars lost large amounts of savings as the old Yugoslavia broke
up at the start of the 1990s and its state-run banking system was unable
to cope without freezing assets.

Since then, a cash-dominated economy has operated in Kosovo as locals
have had no confidence in the banks.

This situation was exacerbated by the fact that the banks were run by
Serbs, mistrusted by Kosovo's ethnic Albanian majority as a result of
state-sponsored Serb repression which was only brought to an end by NATO
bombing earlier this year.

Officials see modern banking in Kosovo as crucial to their plan to
establish a Western market system in place of a state-controlled economy
effectively destroyed by war, mismanagement and mistrust.

Louis Proyect

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