engleski

Financial crisis in Sweeden and Croatia in perspective of EMU-The Banking Union

Sweden is an example of highly developed and internationally competitive economy, which, for many years has been able to generously fund one of the most developed welfare states. Considering the consequences of the current global financial crisis on the Swedish economy and society, we find it rather resistant, because of relatively high degree of independence of monetary policy outside of the EMU, and the stability of financial sector, which largely did not succumb to neo-liberal demands for deregulation, nor is left at the mercy of foreign investors / owners. Valuable experience from the past in Swedish case offers possible strategies to prevent further deepening of the current global crisis and possible way out of the recession. In the short Croatian history as an independent country, the financial system suffered from several banking crises costing the economy around 31% of annual GDP. First crisis occurred in the early 90-ies, second at the turn of the century. Since 2000 a number of banks collapsed in Croatia but the total costs to the government was only reputational as a strong Croatian central bank leadership and state agency for deposit insurance solved all problems with the internal financial industry cash flow and no additional cost to the taxpayers. As response to the global financial crisis which emerged in 2008, the European Union namely the European Commission proposed certain initiatives which include stronger prudential requirements for banks, improved depositor protection and rules for managing failing banks in order to create a safer and sounder financial sector for the single market. In order to avoid future crisis it was agreed to establish a Single Supervisory Mechanism and a Single Resolution Mechanism for banks. Banking Union applies to countries in the euro-area. Non-euro-area countries can also join in. Croatia will eventually be under the jurisdiction of rules of Banking Union when it joins euro-zone (which is mandatory for it) while Sweden has the choice to join the banking Union or to stay out of it due to its opt out clause for introduction of Euro which Sweden has.

Financial crisis ; Sweeden ; Croatia ; banking

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