At its Wednesday meeting chaired by the CNB Governor, Dr Željko Rohatinski, the Council of the Croatian National Bank analysed the most recent economic and monetary indicators, as well as the information on the banking system condition in the first quarter of 2004 and its basic concentration indicators. The Council also adopted a Decision on the Marginal Reserve Requirement, aimed at slowing down direct and indirect foreign borrowing of banks.
The Decision on the Marginal Reserve Requirement requires banks to allocate 24 percent of their foreign liabilities' net increase over June 2004 and deposit the overall amount of this requirement into a special account held with the central bank, in the form of an interest-free foreign currency deposit for an unlimited time period. The marginal reserve requirement calculation base will include the increase in foreign currency and kuna sources of funds received from non-residents and legal persons in a special relationship with a bank.
The reason behind enacting this Decision was provided by the data on the total external debt rising by an approximate EUR 1.93bn over the first five months this year, to EUR 20.8bn or USD 25.4bn. Debt restraint is a key objective of the Memorandum on Economic and Financial Policies, agreed between the Croatian Government and central bank and the International Monetary Fund, which provides the basis for a new stand-by arrangement, to be approved by the IMF in the first week of August.
Should the Decision enacted today not prove effective enough in stabilising the external debt to GDP ratio at the achieved level, the Croatian National Bank will take further measures towards this objective. However, monetary measures will produce a lasting effect only if supported by fiscal and overall economic policy measures, especially those aimed at narrowing the budget and current account deficits.
Acting on proposals from a number of bank supervisory boards, the CNB Council gave its approval for the appointment of new management board chairmen and members, as well as for extending the terms of present chairmen and members.
Accordingly, the Council gave its approval to the appointment of Ivan Filipović as chairman and Ivo Krolo as member of the management board of Banka splitsko-dalmatinska d.d., Split, Josip Šeremet as chairman and Marinko Benić as member of the management board of Brodsko posavska banka d.d., Slavonski Brod, Krešimir Leko as member of the CBRD management board, Željko Jakuš as member of the management board of Kreditna banka d.d. Zagreb, Andrea Zemljić-Modronja as member of the management board of Požeška banka d.d. Požega, Gabriele Pace as member of the management board of Privredna banka d.d. Zagreb, and Zdenko Adrović as chairman and Lovorka Penavić as member of the management board of Raiffeisen Bank Austria d.d. Zagreb.