Kosova Posted on 2024-12-19 15:30:00

The establishment of capital markets in Kosovo is about to take place - The government's decision aims to promote investments and long-term economic growth

From Kristi Ceta

The establishment of capital markets in Kosovo is about to take place - The

The Government of Kosovo has officially approved the Concept Document for the establishment of capital markets, marking a transformative step towards building a vibrant financial system that will promote investments, innovations and long-term economic growth.

The purpose of the Concept Paper is to present selected options to the government, stimulating discussion on the advantages and disadvantages of creating capital markets and associated instruments. Serving as an informative reference, the document aims to start the process of drafting the legal and regulatory framework.

Capital markets can play an essential role in driving economic growth and employment by enabling private sector funds from institutional and private investors to flow into long-term, innovative and riskier projects that may not be easily financed by traditional banks. Moreover, these markets contribute to financial stability by mitigating the harmful effects of bank credit cycles.

Acting as a competitive alternative, they encourage banks to increase efficiency, lower funding costs and expand lending across key strategic sectors, including corporates, small and medium enterprises, infrastructure, housing and climate change.

Currently, Kosovo lacks a regulatory framework for its capital markets. The proposed approach is the adoption of a regulatory framework harmonized with EU rules and adapted according to the current level of capital market development in the country.

This important achievement is the result of a close partnership between the Government of Kosovo, the Central Bank and USAID's Investment Promotion and Access to Finance Activity, which played a key role in the development of this foundational document.

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