The Offer of Financial Derivatives in the Banking Sector of the Republic of Serbia
The Offer of Financial Derivatives in the Banking Sector of the Republic of Serbia

Summary/Abstract: The paper examines the results of the research conducted in the Serbian banking sector considered the only counterparty to companies in the derivative OTC market given that Serbia’s financial system is bank-based. The primary objective is to assess the total level of derivative instruments demand in Serbia and types of derivatives offered by banks. Besides, we also aim to determine the reasons that limit the most the development of the domestic derivatives market and that impact bank activities aimed at attracting derivative business and its development phases. In addition, we explored the expertise of banking sector employees in the financial derivatives field, most often in the Treasury Department. We endeavoured to ascertain the number of staff working in departments in charge of derivatives trading, their professional skills and expertise, qualifications, training and certificates. We have analysed the reasons that most severely restrict the development of the domestic derivatives market and possibilities and limitations of introducing the derivatives market as an unregulated segment on the Belgrade Stock Exchange.This paper also gives a comparative overview of the use of derivatives from the banks’ viewpoint between the banking sectors in Serbia and Bosnia and Herzegovina (BiH) so as to determine the level of derivative instruments demand, types of derivatives offered by the banking sector and possibilities and limitations of introducing the derivatives market as a market segment on stock exchanges in Serbia and Bosnia and Herzegovina.

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