Maintaining A Wary Outlook For Economy And Banks

The Croatian National Bank (HNB) seems to be bracing itself for a banking sector credit crunch, in line with our view. After having raised reserve requirements in October to 14.0% from 13.0%, the HNB has lowered the Lombard rate from 9.0% by 275 basis points to 6.25% on November. The HNB will also allow banks to use mandatory reserve requirements for short-term funding needs on the condition that the banking entity explains to the HNB why they need to tap reserves and that they pay interest on the borrowed funds (Lombard rate plus one for three months, plus two for

To read the full article, please choose one of the following options: