engleski

Banking system structure influence on performance and fragility in financial crisis: case study of Croatia

Apologists for the liberal character of financial markets and proponents of simple and invisible market laws could, in earlier periods, when describing complex social relations, overhaul attitudes related to previously indisputable truths. The character and cause of financial crises were not and still are not explicit enough warnings to socially responsible participants when considering, in a time lag, their consequences for individual economic systems. Commercial banks’ exposure to the present financial (and moreover economic) crisis causes special concern because of the potential immobilization of money funds, illiquidity rise, disability of financing investments, and consumption that amplifies the effects of the crisis. Dimensions and perspectives of banking sector crises are not homogeneous but are related to banking sector, asset and fund and ownership structures and management and supervisory quality. Banks and banking systems that are prone to market intermediation and affirmation of the market in the participation and evaluation of financial positions are extremely sensitive to market distress and exposed to market risks. New capital requests from national and supranational banking authorities and market-risks measurement methods are insufficient to discover risks, protect bank capital, and ensure the banking system as a whole. Traditional banking systems, characterized by balance mediation in financing, are more immune to crises that occur at the level of the global financial system on a reasonable time horizon. Omnipotent financial markets and the financial engineering process has to be controlled and limited using mechanisms that will not disturb basic financial system functionality in financing adequate and natural development with minimum social costs and maximum utility. Given adequate theoretical background and the above-presented economic phenomenon, the aim of this research is to explore and identify present strengths, weaknesses, and potential opportunities and threats to the Croatian banking system in compliance with the essential national particularities and global macroeconomic environment.

Financial crisis ; Banking financial intermediation ; Croatian banking system performance

nije evidentirano