The traditional concept of banking was based on the collection of monetary funds from natural and legal persons, and their placement towards the persons that required these monetary funds, in order to make a profit on the difference between the active and the passive interest rate. In modern banking, banks under the influence of globalization characterized by a high degree of interbank competition, come out of the traditional banking concept and direct part of their financial potential into the building of their investment portfolios. By choosing and applying the right policy for managing the investment portfolio the banks generate profit, but they shouldn’t ignore the level of exposure to the risk associated with operations with financial instruments. The aim of this research is to show that commercial banks, through the change in management policy, respond to the challenges of the modern global financial market, with particular reference to the domicile banking. The research will include traditional banking, the development of financial markets, globalization characteristics, investment banking and the risks banks are facing with, as well as the policy of managing with assets and risks of banks in Bosnia and Herzegovina in general.

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Agencije za bankarstvo RS i FBIH https://www.abrs.ba/ , https://www.fba.ba/

Centralna Banka BiH https://www.cbbh.ba/

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