engleski

Cost of Capital and Price of Banking Intermediation in Croatia

From the very beginning, banks were considered to be the most important financial institutions in every financial system. In a certain aspect, they are treated as the “public good”. It is, therefore, understandable that the entire public, not just regulatory institutions, is interested in their safety and stability. This concern has been reflected differently, but most obviously seen in a slow and constant increase in bank capital requirements over the past few decades. Unfortunately, there has not been an agreement between the banks, regulatory institutions and scientific community on the important issues of effectiveness and sustainability of new capital rules. This paper will point to the complexity of increase in bank capital requirements, as well as mechanism of determining the price of bank intermediation and costs distribution of commercial banks funding, in order to contribute to very limited comprehension of long –term consequences in growth of bank capital requirements.

Bank; cost of capital; Croatia

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