The Croatian National Bank implements macroprudential policy with the aim to mitigate systemic risks and strengthen the resilience of credit institutions to potential losses should systemic risks materialise. When selecting and calibrating the instruments, the CNB also takes into account the type and intensity of the identified systemic risks arising from macroeconomic and financial developments. The legal basis for macroprudential policy implementation is prescribed by the Credit Institutions Act. It is foreseen by different legal forms: as legally-binding, such as capital buffers or risk weights for real estate-secured exposures or as recommendations or guidelines. An important segment of macroprudential policy also includes communication with the expert and general public through regular CNB publications, the releases of the CNB Council or the Financial Stability Council and other forms of communication with the public, such as Governor's speeches and interviews on the topic of financial stability.
In addition to pursuing national macroprudential policy, the CNB also acts in accordance with the ESRB’s recommendations on the reciprocation of macroprudential policy measures adopted by other Member States. The reciprocation of measures is implemented under the ESRB recommendation and the introduction of a macroprudential measure adopted by a Member State for its domestic credit institutions and in other states, which apply it to branches of their banks or to their direct cross-border exposures in the country that first adopted the national measure. In this way, regulatory arbitrage and avoidance of measures are prevented, by which the effectiveness of macroprudential policy is increased.
When implementing macroprudential policy, the CNB currently uses the following instruments: capital buffers (for capital conservation, for systemic risks, for other systemically important credit institutions, and for cyclical risks, stricter risk weights for exposures secured by real estate) and recommendations to mitigate interest rate and interest rate-induced credit risk in consumer loans.
