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It is accepted throughout the world that well designed deposit insurance is an important element in a national safety net for maintaining and extending the stability of the financial system. A key function of deposit insurance is to provide a credible safety net for depositors, which is beyond doubt, including in times of crisis. Still, the design and structure of a deposit insurance scheme (DIS) depends from numerous institutional, procedural and instrumental questions. The designs of DIS of course is important because every insurance scheme produces certain level of moral hazard and affect private market discipline, banking stability, financial development, and the effectiveness of crisis resolution. There are few characteristics of Macedonian banking system that must be taking in to account in order to determine optimal DIS for Republic of Macedonia: concentration of the banking system, ownership of Macedonian banks, supervisory regime and the nationality of depositors. This paper will analyze the best practices for DIS regarding their funding, the coverage ratio and their architecture. Our DIS is ex ante funded but doesn't take in to account the riskiness of its members. In addition, the size of DIS, because of the concentration in the banking system, cannot cover fall of large or some of the medium banks, so the main question is how effective it will be as part of our safety net in such a case. These questions will be addressed through the developments in DIS after the financial crisis from 2008. [ABSTRACT FROM AUTHOR]

Credit cards are very popular product not just as a facilitator for making payment transactions but also because of its flexibility. Customers can decide how quickly they repay their balance, choosing whether to repay it in full at the end of each month or to spread payments over a longer period. Also because of its revolving character the costumers can spend the amount that had previously paid. That opens the question about the risk of indebtedness of this some of the users of credit cards who have persistent debt. The aim of this paper is to analyze the exposure of Macedonian banks to credit cards and to determine if some regulatory measures need to be taken. The exposure towards credit card of Macedonian banking system is more than 15% of total retail exposure and the exposure is stagnant through the years. Also, this exposure compared by number of employed workers on average is 1,5 higher than the average wage. Above 10% of the exposure is toward a clients that continuously have utilization rate of more than 90%. This is a strong indicator about persistent debt that requires regulatory measures in order to be resolved. [ABSTRACT FROM AUTHOR]

The core goal of this paper is to analyze the level of financial inclusion in Republic of Macedonia by comparative approach with three other Balkan countries. The level of financial inclusion of the population is important because there is empirically proven relationship between the use of financial services and poverty reduction. Also, higher level of financial inclusion has positive effects on stable macro environment because diversification of bank assets, thereby reducing their riskiness, increased stability of deposit base, reducing liquidity risk and improved transmission of monetary policy. The analyze show that the access to accounts in financial institution in Macedonia, measured through the percentage of population that has account is good. Still, the use of the account only to receive wage and withdraw from ATM indicates for higher need for financial education. Also, only small part of the population has and use credit card and the statistic for electronic payment is much worste. The borrowings in major part are from relative and friends and from retail stores. In all categories as less financially included are older people, people with smaller income and people how are less educated. This gives clear path for the policy makers where to focus its activities of enhancement of the level of financial education. [ABSTRACT FROM AUTHOR]

The aim of this paper is to elaborate the importance of service sector in the Republic of Macedonia and the financial support that is received from the banks. The services sector represents more than two-thirds of economic activity and four-fifths of growth in recent years in OECD countries. In Macedonia the service sector represents around 30% from the economic activity which is indicator for the level of development of the economy. Further liberalization, removing product market barriers still limiting competition in various subsectors, allowing more FDI are factors that are indicated by experts that can contribute for further development of the service sector. The service sector has more than 40 % share in the total credit exposure of the Macedonian banking system, and the efficiency of this sector has indirect influence of the safety and soundness of the banking system. The share of the service sector in the credit activities of the banks is larger than its share in the economic activity. This is mainly due of the lower risk of this credit portfolio, whose average riskiness is below the industry sector and agriculture. The conclusions about the further indirect contribution of the service sector for development of the banking industry will be drawn based on the comparative analysis with selected OECD countries. [ABSTRACT FROM AUTHOR]