engleski

THE Role of the Financial Derivates in Croatia

Market of financial derivates in Croatia as one of typical post-transition country is less developed then in other financial developed markets. Authors tried to explain discrepancy in different financial markets. The reasons for this discrepancy could be found in lack of knowledge about financial industry in general, but also in poor knowledge about risk management of financial derivates in Croatian financial institutions and Croatian companies. Banking industry in Croatia in last decade developed some level of derivates implementation but it could not be said for non-financial sector i.e. Croatian companies in general. Improving risk management systems can be increased by implementation of use of financial derivates. The paper provides an overview of financial derivates and explains their function in 21st century in general. Authors especially investigate financial derivates such as Mortgage Backed Securities (MBS), Collateralized Debt Obligations (CDO) band Credit Default Swaps (CDS) and the actual role of credit rating agencies in the light of the crisis and post crisis period in the world and in Croatia. Over the counter markets, such as Mortgage Backed Securities (MBS), Collateralized Debt Obligations (CDO) and Credit Default Swaps (CDS) had an impact on the occurrence of the financial crisis of 2008. Dealing with the respective themes authors conclude that trading in financial derivates should be more regulated. Some efforts in the financial regulations are already done but it is not enough as we can see in practice because the markets of financial derivates continuously rise globally.

financial derivates, MBC, CDO, CDS, OCM, Croatian financial market, risk management

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