engleski

Basel II – Case of Croatian commercial banks

In the last decade EU directives have been transposed into regulatory framework of the Croatian financial system, for all relevant financial system parts like credit institutions, insurance and reinsurance firms, investment funds and other financial institutions, which had significantly determined the financial structure in Croatia. Also expected Croatian entrance into euro area would be important factor of determining Croatian future financial architecture. In particular, the Law on credit institutions and extensive set of sub legislative acts issued by Croatian National Bank, which became effective from 2009, onwards regulated key areas of the Croatian credit institutions activities such as minimum standards for establishment, allowed set of activities and supervision of credit institutions, which dominant part are universal commercial banks. It is worth mentioning that in Croatian regulation still are embedded specific national discretions which preserve certain strictness of the regulation of banking system before Croatia accession in European Union integral market. The aim of the paper is to critically evaluate influence of Basel II implementation in Croatian banking system, supporting the hypothesis that although recent financial and economic crises had pointed out imperfections in today’s financial regulatory and supervisory practices of more advanced financial system, due to particular specificities of the Croatian banking system and underdevelopment of total financial and banking structure, up to now revealed are prevalent, numerous positive effects on stability and sustainability of the whole banking system but also significant synergies and value added is observed on the level of individual banks, especially larger institutions.

Bank; Basel II; risk

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