Banking system and its role in Kosovo’s economic development

Abstract

Developing a sustainable banking system is a prerequisite for developing an economy. The purpose of this paper is to extract all the important factors in the nature of banks and their direct role in economic development. This market study aims to analyze the banking system in Kosovo by determining and then analyzing its structure, the degree of concentration of commercial banks in the banking market, their behavior towards price, number of participants, banks operating in this market, types Of the products and services they provide, in order to assess the level of competition of this sector, in accordance with the right of competition. For this purpose, the study describes the functioning of the banking system as a whole and its special segments, regulatory supervisory instruments and their role not only in the functioning of the banking system but also in effective competition. Since the beginning of the operation of commercial banks, which is over 16 years old, the market still dominates high interest rates on loans, which, to some extent, is a burden on economic entities, and thus the economy as a whole.