Abstract: Yugoslavia’s economy and banking sector underwent significant modifications as a result of constitutional amendments passed in the late 1960s that redefined commercial banks as universal financial institutions. These changes also established national banks in each republic and province, considerably limiting the power of the National Bank of Yugoslavia. The 1974 Constitution cemented these reforms and promoted an “agreement economy.” With the increasing autonomy of national banks, the National Bank’s power over monetary policy weakened. During this time, the Yugoslav Banks Association emerged as a prominent actor, actively tracking banking industry changes via publications such as Jugoslovensko bankarstvo (Yugoslav Banking). The journal provides valuable insights, particularly into the late 1980s, when banks began transitioning into joint-stock companies.
Keywords: Yugoslav banking, Serbian banking, self-governing socialism, economic development, banking sector, journal
Summary
Between 1971 and 1980, the Yugoslav banking sector, as detailed in Jugoslovensko bankarstvo, played a crucial role in the country’s economic and social development. Banks were essential in financing infrastructure projects, industrial growth, and social initiatives, ensuring long-term investments that supported the economy. They provided capital for various sectors, from housing to industrial expansion, while continuously assessing the justification of investments. The period also saw the development of the capital market, with banks actively participating in bond issuance, and citizens becoming important investors. Yugoslav banks were increasingly connected to international financial flows, drawing insights from developed countries like the USA, Japan, and France. This global orientation helped improve foreign trade and exports, integrating Yugoslavia into the global economic system. Banks also embraced innovation by introducing financial instruments like leasing, factoring, and marketing, while advancing information systems to incorporate technological progress into banking practices. Despite strong economic growth, the banking sector faced challenges, including income distribution issues and rising indebtedness. Monetary policy was focused on ensuring liquidity to support continued lending, positioning banks as key players in achieving economic goals. From 1981 to 1991, banks continued to play a vital role in financing investments, exports, and capital goods. The Association of Banks of Yugoslavia fostered cooperative strategies, with political figures like Milka Planinc, then Federal PM, attending annual assemblies. Self-governing agreements regulated interest rates and lending, especially for the agro-industrial sector. However, by the late 1980s, issues like monetary instability, balance of payments, and liquidity problems became evident, signaling the challenges ahead as Yugoslavia moved toward collapse.