Building a Central Bank from Scratch in Kosovo
Challenge
After its economy was damaged by the collapse of socialism and war, Kosovo needed to create basic economic institutions from scratch and train people to operate them effectively in order to create trustworthy systems that would facilitate the emerging country’s growth.
Approach
With support from the Government of Japan, the IMF worked with Kosovo to establish basic central bank operations and develop banking and currency laws in line with international best practices. This created a comprehensive ecosystem that fostered financial sector development, price stability, and economic security. Long-term advisors trained all levels of staff, from senior managers to operational officers, to ensure that the necessary knowledge and skills were engrained into the agency’s institutional memory.
Impact
These efforts paved the way for commercial banks to set up shop and provide basic financial services, such as savings accounts and loans. Major infrastructure projects got underway and small businesses sprung up, creating jobs and stimulating economic growth. The trust that was established in the banking system also helped shield Kosovo from some of the most detrimental effects of the 2008 global financial crisis. Many Kosovar staff trained during these early years have now become trainers, sharing knowledge and best practices gained from Kosovo’s early experiences with countries in similar situations around the world.