engleski

Introduction of EURO and its Implications for European and Croatian Financial System

In this paper the EURO and its implications for European and Craotian financial system is examined. It is expected that after January 1, 1999 a single currency and greater capital mobility will lead to more competition among financial institutions , i.e. banks, insurance companies, investment funds, pension funds. This will result in further disintermediation, competition and consolidation in the financial sector in most European countries. To answer the question what impact will this process have on Croatia's financial system a comparative analysis is done regarding the central bank system in Europe (ECB - European Central Bank in Frankfurt) and in Croatia, after that the banking system in several European countries is examined focusing especially on wholesale banking and retail banking and compared again with the Croatian banking system. In general it is expected to be found that financial structures in Croatia are rather underdeveloped compared to those in EU member countries, and markets remain narrow and shallow. Banks are the predominant actors in the financial markets, but other institutions do exist and continue to develop rapidly. So does the insurance industry, consisting of twenty companies, most of which are small and are active only in certain markets, such as car insurance. Up to now two mutual funds and seven closed-end funds were established what improves the number and quality of financial services in the financial market.

EURO

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