Banking in Kosovo has been developing significantly since the country declared its

independence Independence is a condition of a person, nation, country, or state in which residents and population, or some portion thereof, exercise self-government, and usually sovereignty, over its territory. The opposite of independence is the statu ...

in 2008. Banking in

Kosovo Kosovo ( sq, Kosova or ; sr-Cyrl, Косово ), officially the Republic of Kosovo ( sq, Republika e Kosovës, links=no; sr, Република Косово, Republika Kosovo, links=no), is a partially recognised state in Southeast Euro ...

is made up of a network centered on the Central Bank of Kosovo (CBK) with the nodes being

commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with co ...

s and other micro financial institutions.

History

The banking network of the country was devastated during the

Kosovo War The Kosovo War was an armed conflict in Kosovo that started 28 February 1998 and lasted until 11 June 1999. It was fought by the forces of the Federal Republic of Yugoslavia (i.e. Serbia and Montenegro), which controlled Kosovo before the wa ...

. As a new country Kosovo has gone through state building institutions and public reforms. The country's banking network system has been developed from scratch.

Structure

The Kosovo banking network system is an informal and complex network in a sense that it ensures the flow of financial transactions and macroeconomic stability in the country including the Central Bank and other micro financial institutions. The central hub of the network is considered to be the Central Bank of Kosovo (CBK) which is a successor of the Banking Payments and Authority of Kosovo established in June 2008. It is an independent legal entity and reports directly to the

Kosovo Assembly The Assembly of the Republic of Kosovo ( sq, Kuvendi i Republikës së Kosovës; sr, Скупштина Републике Косово, Skupština Republike Kosovo) is the unicameral legislature of the Republic of Kosovo that is directly electe ...

. The Central Bank is considered as a central hub because all other micro financial institutions are connected to the Central Bank and are under its supervision. The nodes of the Kosovo Network Banking system are the mainly

s and other micro financial institutions. The Kosovo network banking system is compounded of eight commercial banks, ten saving and credit association, 12 micro-finance institutions four other non-banking financial institutions and eight insurance companies. On the other hand, the commercial banks and other micro financial institution have their own network as well. Each commercial bank has its headquarters in the capital in

Pristina Pristina, ; sr, / (, ) is the capital and largest city of Kosovo. The city's municipal boundaries in Pristina District form the largest urban center in Kosovo. After Tirana, Pristina has the second largest population of ethnic Albanians an ...

. They also have regional headquarters in the regions and branches in other cities. Kosovo administratively has six regions: Pristina (capital city), Mitrovica, Gjilan, Prizren, Ferizaj, and Peja. Each and every institution has regional base/branches in their respective regions. There are several independent networks of the banks and other micro financial institution within the Kosovo Banking Network System, and they are all connected to the Central Bank. Each banking network has its own central hub the headquarters and its nodes other banks across the country and they are directly linked to their central hub. In addition, they are interconnected among themselves and they form cluster within the network. There is not much data about the characteristics of the network such as

degree distribution In the study of graphs and networks, the degree of a node in a network is the number of connections it has to other nodes and the degree distribution is the probability distribution of these degrees over the whole network. Definition The degre ...

and other statistical interpretations.

Centrality In graph theory and network analysis, indicators of centrality assign numbers or rankings to nodes within a graph corresponding to their network position. Applications include identifying the most influential person(s) in a social network, key ...

of the network plays a crucial role in the Kosovo Banking, as each network depends on their central hub respectively the central bank or the bank's headquarters. Eight different Bank's networks form a complex network of Kosovo Banking Network System. An interbank network is also present and functional in Kosovo, as the ATMs are functional for foreign transactions and withdrawal of cash among banks.

References

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