engleski

Supervision of Non-banking Financial Institutions in Croatia

Financial sector has a specific role in the country’s economy as a driving force of growth and development. In the same way as the efficiency of the national economy can be fostered by the development of financial mechanism, it can be also threatened by possible financial crisis and instabilities. Therefore, a question of regulation and supervision of all parts of financial system are of major importance for any country. The regulations refer mostly to maintenance of financial stability and consumer protection. In order to protect the interest of the society and to accelerate the economy development it is necessary to provide adequate legal framework as well as independent supervision institutions. The structure of the financial sector in the Republic of Croatia is underdeveloped and characterized by domination of the banking sector and the issue of regulatory model of financial sector is solved by adopting the model of a group of independent agencies for each activity. The Croatian National Bank is in charge of the supervision of operations conducted by banks and savings banks. Non-banking financial institutions (investment funds, pension funds, insurances) are regulated by a wide range of regulatory institutions – The Securities Commission of the Republic of Croatia, Agency for Supervision of Pension Funds and Insurances, Directorate for Supervision of Insurance Companies, State Agency for Deposit Insurance and Bank Rehabilitation and Ministry of Finance. Because of such a wide range of regulatory institutions, the problems of authority overlapping and insufficient regulation unavoidably arises, especially by the development and deregulation of financial markets. Because of that, it seems reasonable to investigate the existing regulatory framework of non-banking financial institutions in Croatia. The aim of this paper is to determine if the introducing of an integrated financial supervision of non-banking financial sector is justified. In order to give an answer to this complex question, a comparative analysis will be carried out by presenting a models of consolidated supervision of financial institutions and markets for several European countries. The authors conclude that there are measures to ensure a stable and more efficient financial system.

financial system; non-banking financial institutions; financial market; supervision

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