engleski

Systemic risk governance in Croatian financial system

Global financial crisis has revealed some major lacks in area of financial systems, especially in financial institutions risk management techniques. According to that point, main subject of this paper is identification, assesment, measurement and management of systemic risk. Systemic risk is risk of financial (in)stability which is caused by systemic event that has negative consequences on economy. Systemic risk governance and systemically important financial institutions are sophisticate and complex issue which effects influence on whole economy. In Croatia, issue of systemic risk and systemically important financial institution is insufficient researched. There is only few conducted research on this subject what suggests underestimation of importance of systemic risk and its consequences for real economy. Timely identification and prevetion of financial imbalances according to systemic risk can be achieved through proactive supervision. Regulatory framework and new capital requirements adopted through EU directives does not represent real problem for Croatian banks due to high share of capital in their balance sheets. But there is possibility of imbalances in long run due to future business trend. This paper analyses factors which have influence on banking stability in terms of external shocks and appearance possibility of systemic risk in Republic of Croatia.

systemic risk; systemic risk governance; financial systems; banks; financial institutions

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