D. Implementation

There are many cases in BiH where foreign advisors produced good modern laws and created modern institutions on paper, little happened in practice. The CBBiH was different because there was a high degree of local involvement from the beginning, including in the drafting of the CBBiH Law and all of its internal by-laws. This gradually, over a year or two, was converted into a high degree of local ownership. Governor Nicholl was the only foreigner in the management structure of the CBBiH. The Bank started with 70 staff and this rose over the next few years to 250. All the rest of the staff was Bosnian. Being the only international, Governor Nicholl therefore had to work with and through the local board and management. Many of them had had previous central banking experience, though within a rather different economic system. The level of technical skills in areas like accounting, law, computing, etc., was never a problem. But the ‘old’ system under which most of them had worked did not encourage initiative.

The other important influence on a central bank is the ‘central banking club’. There are strong collegial links amongst central bankers. For example, the CBBiH became a member of the Bank for International Settlements, the central banks’ central bank, in its first year of operations. This was funded by the Dutch authorities. A Central Bank Governors’ Club of the Balkans, Black Sea and Central Asia was formed and met twice a year. CBBiH staff were invited to visit or attend courses at many other central banks in Europe. This support from fellow central banks not only helped the CBBiH achieve efficient operations quickly; it made the local staff of the CBBiH proud to be members of this ‘central banking club’. Few, if any, other State institutions have this support network from their colleagues in other countries.