Nicholl, who is leaving Bosnia after four years of successfully leading the central bank to return to New Zealand, was speaking at a farewell meeting with representatives of the country's banks and other financial institutions.
He said the reduction of the number of commercial banks would likely last five years with the upshot being that the surviving banks would be better.
Nicholl said Bosnia might start issuing securities this year, which will make the country's monetary market fully established.
Estimating Bosnia's prospects of joining the European Union, Nicholl said it would take five to seven years of negotiations before the realisation of that goal.
He said the negotiations might not last that long if Bosnian politicians accelerated the implementation of reforms. He advised Bosnian officials not to waste time inventing new reform models but apply those which had proved successful in Slovakia and Bulgaria.