TheNational Bank of Yugoslavia (NBY,Serbo-Croatian:Narodna banka Jugoslavije) was thecentral bank ofYugoslavia, succeeding theNational Bank of the Kingdom of Serbia inBelgrade in 1920. It was formally known as theNational Bank of the Kingdom of Serbs, Croats and Slovenes until 3 October 1929, and as theNational Bank of the Kingdom of Yugoslavia from then until theinvasion of Yugoslavia in April 1941.
Between 1941 and 1944 during theoccupation of Yugoslavia, its former operations were taken over by theCroatian State Bank in theIndependent State of Croatia and the German-controlledSerbian National Bank inoccupied Serbia, while the rest of the Yugoslav territory was forcibly annexed to the Bulgarian, German, Hungarian and Italian currency zones.
The Yugoslav central bank was re-established in 1945 by the Communist authorities and renamed theNational Bank of the Federal People’s Republic of Yugoslavia on 15 January 1946, shortened to National Bank of Yugoslavia in March 1961. It lasted under that name until 4 February 2003, when it was renamed theNational Bank of Serbia with a reduced geographical scope following thebreakup of Yugoslavia.
On 27 June 1920, the Law on theNational Bank of the Kingdom of Serbs, Croats and Slovenes ratified the adoption of that new name by the formerNational Bank of the Kingdom of Serbia and extended its activity to the whole territory of the recently formedKingdom of Serbs, Croats and Slovenes, following an agreement between the bank and the government of 20 January 1920.[1]: 8 Even though the bank retained the same private shareholders as its Serbian predecessor, it was under the effective control of the government from the start.[2]: 296
In application of theTreaty of Saint-Germain-en-Laye, the National Bank received a significant amount of gold bullion from theAustro-Hungarian Bank in Vienna and took over its branches in the significant parts of the new country that had been part of theHabsburg monarchy, namelySlovenia,Croatia,Vojvodina,Bosnia and Herzegovina: these includedZagreb,Varaždin,Split,Osijek,Ljubljana,Maribor,Sarajevo,Mostar,Banja Luka,Zemun,Novi Sad,Veliki Bečkerek,Subotica,Pančevo, andVršac. Meanwhile, in early 1920 a conflict of competence with the Zagreb-based National Bank was resolved, as a result of which the Croatian upstart was renamedSlavenska Banka.[3]: 157 The transition of the Austro-Hungarian Bank's branches was only completed in August 1921, and the gold transfer in late 1922.[3]: 157-158
The monetary transition was similarly complex. In the war's immediate aftermath, much of the country still used theAustro-Hungarian krone, temporarily rebranded theYugoslav krone, rather than theYugoslav dinar. The exchange of krones against dinars was complex and protracted. It a first phase starting 1 February 1920 and ending on 3 June 1920, the stamped Austrian-Hungarian krone notes were exchanged for new notes denominated in both dinars and crowns, with a new ratio of four crowns for one dinar, which allowed the rebranded crown to keep legal tender status. Then in 1921 the double-named currency concept was abandoned and another exchange replaced the dinar-crown notes with ones exclusively denominated in dinar,[1]: 7 after which the crown eventually lost legal tender status on 1 January 1923.[3]: 155, 162 The poorly organized transition was marked by widespread fraud as krone banknotes printed in Hungary were imported in contraband into Yugoslavia.[3]: 154-156
In 1930, the bank constructed a new facility for the production of banknotes and coins in theTopčider neighborhood of Belgrade.[4] In May 1931, it eventually joined theGold exchange standard, and its governance was simultaneously reorganized, practically transferring any residual control of the private shareholders to the government.[1]: 15 By then, the bank's largest shareholders were banks rather than individuals, as well as government agencies even though the latter's aggregate share was limited to one-fifth of total equity capital.[1]: 30
Immediately afterwards, Yugoslavia was severely affected during theEuropean banking crisis of 1931.[5] Communal politics played a large role in the policy reaction. By the end of 1930, none of Yugoslavia's twelve largest banks, which in aggregate represented half of the system's total assets, was headquartered in Serbia (or Montenegro): eight were in Zagreb, effectively the country's financial center despite the presence of large state-owned credit institutions in Belgrade, three in Ljubljana, and one in Sarajevo.[1]: 15 Faced with major turmoil, the National Bank neglected any concern about the survival of these "non-Serbian" banks and announced on 8 August 1931 that it would not grant any new funding to any bank, focusing instead on defending the currency.[1]: 19 This led all domestic banks, which were weakened by illiquid investments in industrial companies[1]: 38 and from April 1932 by a government-imposed moratorium on agricultural debt repayment,[1]: viii to a state ofde facto insolvency that lasted essentially until the German in 1941, even though foreign-invested banks fared better thanks to external financial support.[1]: viii
In May 1939, following theItalian invasion of Albania the month before and the earlieroccupation of Czechoslovakia by Nazi Germany, the National Bank transferred the bulk of its gold reserves to safety at theBank of England andFederal Reserve Bank of New York.[3]: 177 In the second half of 1940 the National Bank, whose capital had been held since its creation in the 1880s by about twenty Serbian merchant families,[3]: 157 was nationalized, by way of an equity injection after which state institutions held 52 percent of its share capital, financed by bonds issued by theState Mortgage Bank of Yugoslavia.[3]: 181
By 1939, the National Bank had branches inBanja Luka,Bitola,Cetinje,Dubrovnik,Ljubljana,Maribor,Mostar,Niš,Novi Sad,Osijek,Pančevo,Petrovgrad,Šabac,Sarajevo,Skopje,Split,Subotica,Sušak,Varaždin,Vršac, andZagreb.[1]: 31
On 29 May 1941, a decree of the German occupation authorities pronounced the National Bank's liquidation, and it was replaced two days later by the Serbian National Bank.[4] The occupation forces confiscated 11 tons of gold from the bank's vaults, only a fraction of the 53 tons that had been transferred to safety abroad during the previous two years.[2]: 299 The pro-Nazi officialMilan Radosavljević [sr], who had been reappointed Governor in December 1940,[1]: 34 retained his position in the new entity, even though he had no independence under the control of two more powerful German officials, the General Agent for Economic Affairs and the Banking Commissioner.[1]: xiii The Serbian National Bank's activity was primarily oriented towards financing the collaborationist government.[1]: 105
TheYugoslav government-in-exile immediately issued a decree depriving Radosavljević of his position, and appointed Dobrivoje Lazarević as Governor. Unlike other governments-in-exile, however, it did not match these actions with the establishment of an administrative structure for the central bank in foreign territory.[1]: 82 TheYugoslav Partisans had no monetary authority of their own and opportunistically used different currencies in different locations.[6]: 563
The operations of the National Bank in theIndependent State of Croatia were taken over by theCroatian State Bank [hr], established in Zagreb on 10 May 1941.[1]: 85 The State Bank's main activity was to finance the Independent State's government, whose ability to collect tax revenue was severely limited by the war circumstances.[1]: 88 It had branches inBanja Luka,Dubrovnik,Karlovac,Mostar,Osijek,Sarajevo,Varaždin, andZemun, most of which were taken over from the National Bank of Yugoslavia.[1]: 87
Other parts of the dismembered Yugoslavia came under the monetary authority of theReichsbank (e.g. NorthernCarniola andLower Styria),Bank of Italy (e.g.Province of Ljubljana,Dalmatia,Governorate of Montenegro),Hungarian National Bank (e.g. theBanat),National Bank of Albania (e.g.Kosovo), andBulgarian National Bank (most ofMacedonia).[1]: xiii-xiv
In November 1944, after Belgrade was taken over by the Partisans, the Serbian National Bank was liquidated. In February 1945, the Communist authorities dismissed the National Bank officials in exile.[7]: 200 NewYugoslav dinar banknotes, printed in theSoviet Union, were introduced from 20 April 1945 to 9 July 1945.[8]
The era of theSocialist Federal Republic of Yugoslavia was marked by frequent financial sector reforms displaying the whole range of options from radical decentralization to the most extreme centralization, mirroring political factions sometimes labelled respectively "pluralistic" and "monistic",[9]: 366 even as the entire sector was continuously state-owned. In 1945, the Communist authorities created six new state regional banks in the newly establishedrepublics.[9]: 361 On 12 October 1946, a government decree formally established the National Bank of the Federative People's Republic of Yugoslavia.[8] Starting around that time, all existing banks were liquidated and their preserved operations taken over by the National Bank or by theState Investment Bank of Yugoslavia,[10]: 2 which in turn was merged into the National Bank in 1952.[11]: 747 From 1952 to 1955, Yugoslavia exhibited a puremonobank system in which the National Bank was the single financial intermediary for the entire country.
From 1955, the monobank framework was softened with the re-establishment of communal (local) banks and of specialized banks.[10]: 3 The latter included the Yugoslav Bank for Foreign Trade (1955, later known asJugobanka [sr]), Yugoslav Investment Bank (1956, later known asInvestbanka [sr]), and Yugoslav Agricultural Bank (1958),[9]: 362 complemented in 1978 with the Yugoslav Bank for International Economic Cooperation.[10]: 4 In 1961–1962, "regional banks" were established in each of the country's six Republics.[10]: 3 More freedom to create investment banks and commercial banks was introduced in 1965, further eroding the overwhelming dominance of the National Bank.[10]: 3, 6 As a consequence, many new banks were formed in the 1960s and 1970s, including non-depository "internal banks" (financial arms of companies and other public bodies) and depository "basic banks".[12]: 107 Among these,Beobanka [sr] andBeogradska banka [sr] became the system's dominant banks together with Jugobanka and Investbanka, but all would have had to be liquidated in 2002 after they were found insolvent together with 80 percent of what then remained of the Yugoslav banking sector.[13]
In 1971–1972, a major reform resulted in the establishment of a "system of national banks" with the NBY at its center. A separate "National Bank" was established in each of the country'ssix Republics and two Autonomous Provinces, forming an integrated system together with the NBY,[12]: 103 with a Board of Governors consisting of the respective heads of the NBY and of the eight sub-federal National Banks. The latter were autonomous institutions under the law of their respective sub-federal jurisdictions.[10]: 4
The policy framework was associated with an increasingly dramatic loss of control overinflation, which reached an annual average 17.5 percent during the 1970s, 75 percent in the 1980s,[14]: 3 and a hyperinflationary regime by the end of 1989.[14]: iii The National Bank accumulated macroeconomically significant losses during that period.[14]
In January 1991, it was revealed that the Parliament of the Yugoslav Republic of Serbia had passed secret legislation compelling the respective National Banks of Serbia, Kosovo and Vojvodina to provide $1.8 billion worth of funding without approval or knowledge of the federal government, in egregious breach of the Yugoslav monetary system's legal framework that was described as "theft from the other republics" and "an astonishing act of economic sabotage".[15] This event accelerated thebreakup of Yugoslavia, during which the respective National Banks ofBosnia and Herzegovina,Croatia,Macedonia, andSlovenia left the NBY-centered system and became fully independent central banks for their respective countries. In late 1992, all four republics became members of theInternational Monetary Fund, as also did rump Yugoslavia which in the meantime had renamed itselfSerbia and Montenegro.[16] In 1993, the respective National Banks ofKosovo,Montenegro,Serbia, andVojvodina were merged back into the NBY.[8]
In November 1999, theUnited Nations Interim Administration Mission in Kosovo established the Banking and Payments Authority of Kosovo inPristina,[17] which in 2010 became theCentral Bank of Kosovo.[18] In March 2001, theCentral Bank of Montenegro was established following legislation passed the previous year, even though it no longer had an independent monetary policy role following Montenegro's unilateral adoption of theDeutsche Mark as solelegal tender from 1 January 2001.[8] In February 2003, the National Bank of Yugoslavia, which no longer had monetary authority over either Kosovo or Montenegro, was renamed theNational Bank of Serbia.
The National Bank kept its head office in theNational Bank Building, Belgrade, originally erected for the National Bank of the Kingdom of Serbia in 1890, and expanded it in 1922-1925 on designs by the original architect,Konstantin Jovanović. In 1920, it had taken over a number of former branches of theAustro-Hungarian Bank. It then developed a program of construction of new branches, entrusted to architectBogdan Nestorović [sr], the most prominent of which were those inDubrovnik,Karlovac,Kragujevac,Mostar,Šabac, andSkopje.[19] The latter was built on a very prominent location, on the spot where theMuseum of the Macedonian Struggle was erected in 2008–2011.
In the Communist era, the National Bank took over the previous properties of all previously existing banks in the country. For example, the Southwestern wing of theGeneral Post Office, Belgrade, which had been erected as the seat ofPoštanska štedionica in the late interwar period, was used by the National Bank from 1946 to 2006, after which it became the seat of theConstitutional Court of Serbia. Many of these buildings were subsequently reallocated, either to newly created banks or to other organizations.
In the 1970s, some of newly created "national banks" at the level of individual republics or autonomous provinces commissioned new buildings, most notably inPristina andSkopje, while others appropriated existing properties, such as the National Bank of Slovenia in the former head office of theLjubljana Credit Bank, the National Bank of Bosnia and Herzegovina in the former branch building of theState Mortgage Bank of Yugoslavia inSarajevo, and the National Bank of Croatia in the former stock exchange building inZagreb.
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![Former branch in Dubrovnik, completed 1936[20]](/mt/?noimg=&dark=on&url=http%3a%2f%2fen.wikipedia.org%2fwiki%2fFile%3aNarodna_Banka_Dubrovnik.jpg)
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![Former branch [sr] in Šabac, completed 1938](/mt/?noimg=&dark=on&url=http%3a%2f%2fen.wikipedia.org%2fwiki%2fFile%3a%25C5%25A0abac%2c_Cetar_grada_057.jpg)
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