Author(s):
1. Slaven Grizelj, Faculty of Economics, University of Mostar, Federation of Bosnia and Herzegovina , Bosnia and Herzegovina

Abstract:
Leasing as a model of financing is quite new and has been applied in BiH for relatively short period. This funding model is very practical for small, medium and large enterprises to raise production funds and other assets without spending their own funds and without borrowing from banks on financial markets (the need for additional collateral). By collapse of the U.S. financial system, it is has been proved that the polycentric financial structure, which is believed to be characteristic of the most developed and risk resistant system, is actually fragile and vulnerable. At the global level, it is evident that both the European and Japanese financial system are bank-based and much more stable and resilient to risks in a crisis. This paper will explore the impact of the global financial crisis on the B&H financial sector, the leasing market in particular. The aim is to determine how the financial sector is stricken by financial crisis. Furthermore, the paper will show that B&H there is an insufficient degree of use of leasing as a financing model, and fundamental problems that face leasing sector will be identified. Results out of this research had shown the impact of financial crisis in the leasing sector in at least two parts. First, the financial crisis has led to a reduction in lending activity and as a source of financing for leasing companies exactly out of the loan(no deposits) this decreased funding opportunities due to lack of resources. Secondly, the financial crisis and recession led to a sharp reduction in demand for leasing arrangements so noticeable a large drop in activity in the market. It is shown the trend of change in credit policy of leasing companies-orientation from corporate to the retail.

Key words:
financial system, global financial crisis, leasing market, B&H

Date of abstract submission:
24.01.2014.

Conference:
REDETE 2014 - Researching Economic Development and Entrepreneurship in Transition Economies