At the sitting held on 9 October, the members of the Finance Committee were briefed on the Report on the measures implemented to alleviate the negative effects of the world financial crisis on the financial system of the Republic of Serbia, and through it on the state of economy and citizens’ standard.

The sitting was chaired by the Committee Chairperson, Jorgovanka Tabakovic, and attended by the Governor of the National Bank of Serbia, Radovan Jelasic, State Secretary at the Ministry of Finance, Slobodan Ilic, President of the Securities Commission, Milko Stimac, as well as numerous interested deputies.

Answering deputies’ questions, the Governor of the National Bank of Serbia, Radovan Jelasic, summarised the events on the international financial market and the measures implemented to avoid world economic recession. The international market crisis affects Serbia above all by the increase of the six month euribor from 4.3% in January this year to 5.4% which influences the increase of interests on variable interest rate loans indexed in euros. Governor Jelasic stated that the state’s loans abroad have gone up, and the activity of business banks has slowed down. The Governor informed the Committee members that 28 of the 35 banks in Serbia informed the National Bank that they will not raise the margins to already granted loans, while new loans are granted at a higher interest rate. He added that the financial system is not in jeopardy and that the banking sector is solvent and liquid. Foreign currency reserves amounted to 9.7 billion euros, on 30 September 2008, out of which 72% is in securities, 24% are deposits and 4% is in gold and effective foreign currency. The National Bank regularly informs the Government of the Republic of Serbia on current events, cooperates with business banks and informs the public on all activities implemented. In the upcoming period, the National Bank will continue implementing measures to stabilise the prices and keep the stability of the financial sector.

State Secretary at the Ministry of Finance Slobodan Ilic deemed that there is no need to increase the amount of insured deposits in the banks because the savings structure in Serbia is such that over 80% of savers have deposits of less than 3 000 euros which are covered by the regulations in force.

The President of the Securities Commission, Milko Stimac briefed the Committee members on the activities implemented by the Commission. He stated that the Commission has been constantly in session since the events on the capital market and announced that the stock exchange will not be closed. The difficulties the capital market faces in Serbia are not the result of the international crisis, but problems that the market has been having for a while.

The Committee members, deputies and representatives of financial institutions exchanged opinions on the effect of the world financial crisis on the economy, banking and small and medium enterprises in Serbia.