Banja Luka plays an important role on different levels of Bosnia and Herzegovina's government structures. Banja Luka is the center of government for the Municipality of Banja Luka.

Economy

Although the city itself was not directly affected by the war in the early 1990s, Banja Luka's economy was. For four years, Banja Luka fell behind the world in key areas such as technology, resulting in a rather stagnant economy today.

In 1990, the Banja Luka region had exports worth 400 million US$. Although the economy today is a far cry from what it used to be, many of the industries are the same. Among the chief industries in Banja Luka are metal working, wood processing, leather, textiles, rubber processing, the tobacco industry, and food processing.

In recent years, financial services sector has gained in importance in the city. In 2002, trading began on the newly-established Banja Luka Stock Exchange. Since then, the stock exchange has gone from strength to strength. The number of companies listed, the trading volume and the number of investors have increased significantly. A number of big companies such as Telekom Srpske, Rafinerija ulja Modriča, Banjalučka pivara and Vitaminka are all listed on the exchange and are traded regularly. Investors, apart from those from Slovenia, Croatia and Serbia, now include a number of investment funds from the EU, Norway, USA, Japan and China.

A number of financial services regulators, such as the Republika Srpska Securities Commission and the RS Banking Agency are headquartered in Banja Luka. This, along with the fact that some of the major banks in Bosnia, the Deposit Insurance Agency and the Value-added tax (VAT) Authority are all based in the city, has helped Banja Luka establish itself as one of the main financial centres of the country.