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14th Financial Stability Council session
The Financial Stability Council held its 14th session at the Croatian National Bank, chaired by the CNB Governor Boris Vujčić, and attended by the Minister of Finance of the Republic of Croatia Zdravko Marić, the Croatian Financial Services Supervisory Agency Board President Ante Žigman, the Director of the State Agency for Deposit Insurance and Bank Resolution Marija Hrebac, and their associates.
The Council members were briefed on the state of the financial system and the risks to its stability associated with the coronavirus pandemic. Notwithstanding the expected increase in the systemic risk exposure of the Croatian financial system, its stability has not been threatened due to the notable reduction in structural weaknesses of the economic and financial system in recent years. This favourable starting position, coupled with a swift and strong response by economic policymakers and supervisory authorities, has mitigated the negative consequences of the fight against the pandemic. The Council discussed the actions of all the institutions participating in the Council, their effectiveness, interaction between various measures and policies, as well as the need to monitor and analyse their effects.
In addition to the Government’s measures to support the economy and households, analysed were the measures taken by the Croatian National Bank and the Croatian Financial Services Supervisory Agency, in particular those intended to ease the financial position of the private sector. Majority of the measures relate to a moratorium on and/or rescheduling of existing loan and leasing contracts with clients affected by the pandemic; 37 thousand applications for a moratorium and other credit measures (almost half of which has been approved), and 34 thousand applications for the rescheduling of leasing contracts (75% of which has been approved) were submitted by the middle of May. The analysis shows that only a small number of applications relates to new loans for liquidity and that the dynamics of their approval is not satisfactory. Financial institutions are therefore expected, in accordance with their business policies, to speed up the processing of requests for new loans to clients affected by the pandemic.
The Annual Report on the Council’s activity in 2019 was adopted at this session.