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ABOUT THE CROATIAN NATIONAL BANK |
The Croatian National Bank, as stipulated by the Constitution of the Republic of Croatia, is the central bank of the Republic of Croatia. The status, tasks, objectives and capital ownership of the central bank, its powers, organisation and relations with the bodies of the Republic of Croatia, banks and international institutions and organisations are regulated by the Act on the Croatian National Bank (Official Gazette 75 of 1 July 2008)
Establishment of the
Croatian National Bank Article 53 of the Constitution
of the Republic of Croatia, adopted on 21 December 1990, determines the Croatian
National Bank as the central bank of the Republic of Croatia with the following
responsibilities: “The National Bank of Croatia shall be the central bank of the
Republic of Croatia. The National Bank of Croatia shall, within the framework of
its rights and duties, be responsible for the stability of the currency and for
general payment liquidity at home and abroad. The National Bank of Croatia shall
be independent in its work and shall be responsible to the Croatian Parliament.
Profits made through the operations of the National Bank of Croatia shall accrue
to the state budget. The status of the National Bank of Croatia shall be
regulated by law.”
Status of the
Croatian National Bank The Croatian National Bank is
the central bank of the Republic of Croatia. It is autonomous and independent in
achieving its objective and carrying out its tasks. The Croatian National Bank
has legal personality, but it is not entered in the register of companies. The
Croatian National Bank has its seat in Zagreb. The seal of the Croatian National
Bank consists of an image of the coat of arms of the Republic of Croatia and the
name of the Croatian National Bank. The Croatian National Bank is represented by
the Governor of the Croatian National Bank. The Croatian National Bank is in the
exclusive ownership of the Republic of Croatia.
Objectives of the
Croatian National Bank
The objective of the Croatian National Bank is to maintain
price stability. Without prejudice to the achievement of its objective, the
Croatian National Bank supports the economic policy of the Republic of Croatia,
while acting in accordance with the principle of an open market economy with
free competition.
Tasks of the Croatian National Bank The Croatian National Bank has the following tasks:
Capital, financial and other statements of the Croatian National
Bank
The capital of the Croatian National Bank shall amount to HRK 2,500,000,000.00.
The capital of the Croatian National Bank may not be transferred or pledged. The
surplus of income over expenditures of the Croatian National Bank is allocated
to general reserves and to the state budget.
The Croatian National Bank prepares financial statements for each financial year
in accordance with accounting regulations and the International Accounting
Standards. The prepared financial statements and the overall operation of the
Croatian National Bank shall be audited by independent external auditors in
accordance with audit regulations and the International Auditing Standards. The
decision on the auditor to audit the financial statements of the Croatian
National Bank shall be made by the Finance and Central Budget Committee of the
Croatian Parliament on the proposal of the Council of the Croatian National
Bank.
The Croatian National Bank, on a semi-annual basis, informs the Croatian
Parliament about its financial condition, the level of price stability achieved
and monetary policy implementation. On a monthly basis, and at the latest within
ten working days from the end of the previous month, the Croatian National Bank
prepares, draws up and submits to the Ministry of Finance its summary balance
sheet as at the last day of the month concerned. The Croatian National Bank may
publish the said financial and other statements, and it may also publish such
other reports and studies on financial and economic issues as it deems
appropriate.
Transparency
of operation and informing the public
The Croatian
National Bank provides regular and timely information to the public on its
analyses of the macroeconomic situation, financial and monetary system
conditions, monetary and lending developments, balance of payments, exchange
rates and price stability, and publishes statistical information within its
competence.
Relations with government bodies of the Republic of
Croatia In achieving its legally
prescribed objective and carrying out its tasks the Croatian National Bank may,
without prejudice to the achievement of its objective, cooperate with the
Government of the Republic of Croatia and other government bodies and take
actions, within its competence, to promote such cooperation. The Croatian
National Bank keeps the accounts of the Republic of Croatia and executes payment
transactions across these accounts. The Croatian National Bank may authorise
another legal person to execute payment transactions across the accounts of the
Republic of Croatia, in accordance with the terms and conditions laid down by
the Croatian National Bank, subject to approval of the Ministry of Finance. The Croatian National Bank may be a member of
international institutions and organisations competent for monetary policy,
foreign exchange policy, payment operations, the supervision of credit
institutions and other areas within its competence, and may participate in their
work. The Croatian National Bank may also represent the Republic of Croatia in
these international institutions and organisations.
Organisation and Management of the
Croatian National Bank
A Regulation on the National Bank of Croatia of 8 October 1991 and a Decision on
the Replacement of Yugoslav Dinars by Croatian Dinars (entered in effect on 23
December 1991) stipulated in more detail the central bank’s duties and
responsibilities.
The Act on the National Bank of Croatia of 4 November 1992 replaced the quoted
Regulation and set out the legal framework for the operation of the central bank
of the Republic of Croatia. The Croatian National Bank was given its present
name in the Constitutional Act on Revisions and Amendments of the Constitution
of the Republic of Croatia of 15 December 1997.
In the consolidated text of the Constitution of the Republic of Croatia
(Official Gazette 41/2001) the quoted Article 53 is changed as follows: “The
Croatian National Bank shall be the central bank of the Republic of Croatia. The
status, rights and obligations of the Croatian National Bank shall be regulated
by law. The Croatian National Bank shall be independent in its work and shall be
responsible to the Croatian Parliament.”
The Croatian National Bank Act adopted on 5 April 2001 determines, among other
things, the status, operations, ownership status, powers and organisation of the
Croatian National Bank. This act promotes institutional, financial, and personal
independence of the Croatian central bank, and offers a legal framework for its
operations which is more in line with that found in the European Union. It
determines the primary objective of the Croatian National Bank which is to
achieve and maintain price stability.
The Act on Amendments to the Croatian National Bank Act, adopted in December
2006, reinforces the independence of the central bank and establishes the legal
conditions for the CNB to become, as of the date of accession of the Republic of
Croatia to the European Union, an integral part of the European System of
Central Banks (ESCB) and to start carrying out its tasks in accordance with the
Statute of the ESCB and the European Central Bank (ECB).
A new Act on the Croatian National Bank, in force since July 2008, further
aligns the legal framework for the operation of the Croatian central bank with
legal standards of the EU, especially with regard to the degree of independence
of the central bank (institutional, functional, personal and financial
independence) and the objective of the Croatian National Bank, and sets forth
the conditions for the smooth functioning of the CNB within the ESCB and the ECB
and for the introduction of the euro as the official currency of the Republic of
Croatia. The CNB Act, which incorporates the remarks of the European Central
Bank and the European Commission, also takes into account the anticipated
changes in other national legislation, for example by introducing the terms
"credit institution", "payment transaction settlement system", etc., within the
scope required for its purposes, and contains other necessary adjustments
pursuant to the Statute of the ESCB and the ECB and secondary legislation of the
EU (regulations, recommendations, guidelines, etc.).
The Croatian dinar, introduced on 23 December 1991 as a transitional, interim
currency of the independent Croatian state became the sole legal tender in the
Republic of Croatia on 1 January 1992. It was replaced by the kuna on 30 May
1994, when this currency was introduced as the permanent official legal tender
in the Republic of Croatia.
The Croatian National Bank is independent in adopting and enforcing its
decisions which are based on the Act on the Croatian National Bank and neither
seeks nor takes instructions from the bodies of the Republic of Croatia, the
bodies of the European Union or other persons. The bodies of the Republic of
Croatia or other persons may not influence the adoption and enforcement of the
decisions of the Croatian National Bank, nor may they approve, revoke, postpone,
cancel, or influence in any other form any decision taken by the Croatian
National Bank, or its decision-making bodies, within its competence.
The Croatian National Bank may, on such terms and conditions as it agrees with
the Ministry of Finance, act as fiscal agent for the Republic of Croatia, in
regard to the issuance of debt securities of the Republic of Croatia, acting as
registrar or transfer agent therefore; the payment of the principal of, interest
on and other charges related to such securities and other matters relating to
these transactions, provided they are consistent with the objective of the
Croatian National Bank.
At least once in a semi-annual period, the Ministry of Finance consults with the
Croatian National Bank on its plans for domestic and foreign borrowing of the
Republic of Croatia during the next semi-annual period, including the amounts to
be contracted and disbursed under such borrowing, as well as the expected
effects of such borrowing. The Ministry of Finance reports to the Croatian
National Bank on all domestic and foreign borrowing transactions of the Republic
of Croatia, in such detail as mutually agreed upon by the Croatian National Bank
and Ministry of Finance.
The Croatian National Bank may require from the Government of the Republic of
Croatia to propose to the Croatian Parliament the enactment of laws concerning
the achievement of the objective and carrying out of the tasks of the Croatian
National Bank, or otherwise relating to its field of activity, including
monetary policy and operations, extension of credits, balance of payments,
payment operations, foreign exchange policy and banking matters.
The Croatian National Bank may not extend credit to the Republic of Croatia,
extra-budgetary funds of the Republic of Croatia, units of local and regional
self-government and other public authorities in the Republic of Croatia, as well
as public undertakings over which the Republic of Croatia and units of local and
regional self-government exercise a dominant influence, nor may it purchase
their debt instruments directly from them.
No legal arrangement concluded by the Croatian National Bank with the Republic
of Croatia, extra-budgetary funds of the Republic of Croatia, units of local and
regional self-government and other public authorities in the Republic of
Croatia, as well as public undertakings over which the Republic of Croatia and
units of local and regional self-government exercise a dominant influence, may
have credit features or be used for extending credit to the Republic of Croatia,
extra-budgetary funds of the Republic of Croatia, units of local and regional
self-government and other public authorities in the Republic of Croatia, as well
as public undertakings over which the Republic of Croatia and units of local and
regional self-government exercise a dominant influence, or to third parties
acting as intermediaries through which the Republic of Croatia would become the
final beneficiary of such credit.
The purchase by the Croatian National Bank of debt securities issued by the
Republic of Croatia, extra-budgetary funds of the Republic of Croatia, units of
local and regional self-government or other public authorities in the Republic
of Croatia, as well as by public undertakings over which the Republic of Croatia
and units of local and regional self-government exercise a dominant influence,
are not be considered as credit referred to in Article 40 of the Act on the
Croatian National Bank, if such purchase has been made in the secondary market
in accordance with the monetary policy objectives of the Croatian National Bank.
The Croatian National Bank is a member of the Bank for International
Settlements.
The Council of the
Croatian National Bank
The Council of the Croatian National Bank comprises the Governor, Deputy
Governor and Vicegovernors of the Croatian National Bank by virtue of their
office and at most eight external members. The Council of the Croatian
National Bank is competent and responsible for the achievement of the
objective and for the carrying out of the tasks of the Croatian National
Bank and defines policies with respect to the activities of the Croatian
National Bank.
The Council of the Croatian National Bank has the following tasks:
- to define the monetary and foreign exchange policies;
- to adopt the financial plan of the Croatian National Bank;
- to adopt the reports referred to in Article 62 of the Act on the Croatian National Bank;
- to adopt the Statute of the Croatian National Bank;
- to define terms and conditions for granting loans to credit institutions;
- to establish interest rates of the Croatian National Bank and fees for the services rendered by the Croatian National Bank;
- to establish the calculation base and the rate of the required reserves, as well as the method, conditions and time limits for the allocation and maintenance of required reserves, and conditions for the use of required reserves;
- to issue and withdraw authorisations of credit institutions with registered offices in the Republic of Croatia and branches of credit institutions with registered offices outside the Republic of Croatia;
- to establish the insolvency of credit institutions and decide on submitting proposals for the initiation of bankruptcy proceedings against credit institutions or on the withdrawal of authorisations of credit institutions;
- to approve mergers of credit institutions and acquisition of shares in credit institutions in accordance with the law governing the operation of credit institutions;
- to approve the appointments of chairpersons and members of credit institutions' management boards;
- to adopt subordinate legislation regulating the foreign exchange operations of legal and natural persons and the operation of authorised foreign exchange offices;
- to issue and withdraw authorisations of the payment transaction settlement systems and adopt subordinate legislation regulating their operation;
- to decide on the denominations and features of banknotes and coins and their putting into and withdrawal from circulation;
- to formulate strategy and policies for foreign reserves management;
- to decide on the Croatian National Bank's membership in international institutions and organisations;
- to decide on the establishing and closing of the branches
and representative offices of the Croatian National Bank.
Decision-making of the CNB Council
The Council of the Croatian National Bank takes decisions on matters within its
field of activity at its meetings. The Statute of the Croatian National Bank
specifies the matters within the competence of the Council of the Croatian
National Bank which the Council of the Croatian National Bank may delegate to
the Governor of the Croatian National Bank.
The Governor of the Croatian National Bank is the Chairperson of the Council of
the Croatian National Bank. The meetings of the Council of the Croatian National
Bank are convened and chaired by the Governor of the Croatian National Bank. In
his/her absence, the Chairperson of the Council of the Croatian National Bank is
replaced by the Deputy Governor of the Croatian National Bank. The meetings of
the Council of the Croatian National Bank are valid provided a two-thirds
majority of all the members of the Council of the Croatian National Bank are
present at the meetings. The Council of the Croatian National Bank takes
decisions with a two-thirds majority of the members present at the meeting.
Should the Council of the Croatian National Bank, in its decision-making
process, not reach the necessary agreement, or should it be impossible to hold
the meeting of the Council owing to exceptional circumstances which result in a
failure to meet the conditions referred to in
Article 47, paragraph (4) of the Act on the Croatian National Bank, and
should the Governor of the Croatian National Bank assess that, owing to the
failure to reach the agreement, the carrying out of the tasks or regular
operations of the Croatian National Bank cannot be guaranteed, the Governor of
the Croatian National Bank is authorised to take the decision.
Governor of the Croatian National Bank
The Governor of the Croatian National Bank is responsible
for the implementation of the decisions of the Council of the Croatian National
Bank.
The Governor of the Croatian National Bank:
- manages and governs the operation of the Croatian National Bank;
- organises the functioning of the Croatian National Bank;
- represents and acts for the Croatian National Bank;
- regulates detailed conditions for and methods of exercising the supervision and oversight, the types, time limits, order of and procedure for taking measures with respect to credit institutions;
- adopts decisions in the process of supervision and oversight of credit institutions;
- adopts internal bylaws on the functioning and development of the Croatian National Bank information system;
- appoints and removes from office persons vested with special powers and responsibilities in the Croatian National Bank;
- adopts internal bylaws on the internal organisation and job classification in the Croatian National Bank and internal bylaws on the rights, duties and responsibilities of the Croatian National Bank employees;
- adopts subordinate legislation, decisions and internal bylaws on matters within the field of activity of the Croatian National Bank which, pursuant to law, are outside the competence of the Council of the Croatian National Bank;
- decides on other issues falling within
the competence of the Governor of the Croatian National Bank pursuant to the
Act on the Croatian National Bank and other laws and regulations, as well as
on other issues when authorised by the Council of the Croatian National Bank.
Appointment and status of the members of the CNB Council
The Governor of the Croatian National Bank is appointed by the Croatian
Parliament on the proposal of the Elections, Appointments and Administration
Committee, taking into account the opinion of the Finance and Central Budget
Committee. The Croatian National Bank has a Deputy Governor and, at most, four
Vicegovernors. The Deputy Governor and Vicegovernors are appointed by the
Croatian Parliament on the proposal of the Governor of the Croatian National
Bank.
The external members of the Council of the Croatian National Bank are appointed
by the Croatian Parliament on the proposal of the Elections, Appointments and
Administration Committee, taking into account the opinion of the Finance and
Central Budget Committee.
The members of the Council of the Croatian National Bank must be citizens of the
Republic of Croatia of high personal reputation and professional experience in
monetary, financial, banking and/or legal matters.
The members of the Council of the Croatian National Bank are appointed for a
term of six years. During their term of office, the Governor, Deputy Governor
and Vicegovernors of the Croatian National Bank are entitled to a salary and to
material and other rights arising from their employment pursuant to internal
bylaws of the Croatian National Bank. The Act on the Prevention of Conflict of
Interest in the Exercise of Public Office applies to the rights and obligations
of the Governor, Deputy Governor and Vicegovernors of the Croatian National Bank
which are not set forth by the Act on the Croatian National Bank or the Statute
of the Croatian National Bank.
Persons not allowed to be members of the CNB Council and other restrictionsl
A member of the Council of the Croatian National Bank may not be a
representative in the Croatian Parliament, or a person performing a duty to
which he/she has been appointed by the Croatian Parliament or by the Government
of the Republic of Croatia; a member of the Council may not be a member of the
Government of the Republic of Croatia or a person performing a duty in the local
and regional self-government bodies, political parties and trade unions
A member of the Council of the Croatian National Bank, his/her spouse and
children who are members of his/her household or with whom he/she conducts
business, may not own shares or holdings in the legal persons which are
authorised by or whose operation is supervised by the Croatian National Bank,
nor may they own shares or holdings in other legal persons connected with the
said persons by ownership, management or function, or shares or holdings in
audit firms and persons connected therewith.
A member of the Council of the Croatian National Bank may not be a member of
bodies, an employee or an external associate of the legal persons which are
authorised by or whose operation is supervised by the Croatian National Bank,
audit firms or other legal persons connected with these legal persons by
ownership and management, or persons who derive or might derive benefit from
such a Council member's access to the business secret or information not
intended for the public. A member of the Council of the Croatian National Bank
may neither be a person whose spouse or child, who is a member of his/her
household or with whom he/she conducts business, is a member of the supervisory
board, management board or board of directors of legal persons which are
authorised or whose operation is supervised by the Croatian National Bank, or an
owner of shares or holdings in other legal persons connected with the said
persons by ownership, management or function, or a member of the supervisory
board, management board or board of directors of audit firms and persons
connected therewith.
Removal from office of the members of the CNB Council
The Croatian Parliament shall remove from office the Governor, Deputy Governor
and Vicegovernors of the Croatian National Bank and external members of the
Council of the Croatian National Bank before the expiry of the six-year term in
the following cases:
- if any of the circumstances referred to in Article 45 of the Act on the Croatian National Bank arises after the appointment to the office;
- if they have been sentenced to prison by final judgement in criminal proceedings;
- if the Council of the Croatian National Bank establishes serious misconducts in the performance of their duties, or acts indicating their low moral and professional integrity;
- if they are permanently unable to perform their duties owing to illness;
- if they themselves demand to be removed from office;
- if they fail to submit, or submit a false statement of information on the matters referred to in Article 45 of the Act on the Croatian National Bank.
No member of
the Council of the Croatian National Bank may be removed from office for any
cause not set out in Article 46, paragraph (1) of the Act on the Croatian
National Bank.
Upon assuming office and after the end of each year, each member of the Council
of the Croatian National Bank submits a written statement to the Council of the
Croatian National Bank containing information on the matters related to
circumstances which are contrary to their membership in the Council of the
Croatian National Bank.
Should the Council of the Croatian National Bank establish that any of these
circumstances has arisen, it is obliged to immediately notify the Croatian
Parliament thereof and propose that the concerned member of the Council of the
Croatian National Bank be removed from office.
Should the Croatian Parliament not remove from office a member of the Council of
the Croatian National Bank within 30 days after any of these circumstances has
arisen, the Council of the Croatian National Bank may decide to preclude this
member from participating in the meetings of the Council of the Croatian
National Bank pending a final decision by the Croatian Parliament.
CNB following the accession of the Republic of Croatia to the European Union
The amendments to the Croatian
National Bank Act of December 2006 (Official Gazette 35/2006 – Article 8,
paragraph (1), Article 9 through 12, Article 13, paragraph (1), Article 14
through 17 and Article 23, Title VIII, Title IX) establish the legal conditions
for the CNB to become, as of the date of accession of the Republic of Croatia to
the European Union, an integral part of the European System of Central Banks
(ESCB) and to start carrying out its tasks in accordance with the Statute of the
ESCB and the ECB. The Act on the Croatian National Bank now in effect (it came
into effect on 9 July 2008) further aligns the legal framework for the operation
of the Croatian National Bank with legal standards of the EU, especially in the
part relating to the degree of independence of the central bank (institutional,
functional, personal and financial independence) and the objective of the
Croatian National Bank, and sets forth the conditions for the smooth functioning
of the CNB within the ESCB and ECB and for the introduction of the euro as the
official currency of the Republic of Croatia.
Croatia's accession to the European Union will lead to a change in the
composition of the CNB Council and CNB management. The CNB Council will comprise
eight members, including the Governor, Deputy Governor and six Vicegovernors, to
be appointed by the Croatian Parliament on the proposal of the Elections,
Appointments and Administration Committee and taking into account the opinion of
the Finance and Central Budget Committee. The members of the CNB Council will be
full-time employees of the CNB. The CNB Governor will become a member of the
General Council of the ECB.
The term of office of the external members of the Council of the Croatian
National Bank, appointed pursuant to the provisions of the former Croatian
National Bank Act (Official Gazette 36/2001) or the Act on the Croatian National
Bank now in force, will terminate as of the date of accession of the Republic of
Croatia to the European Union, whereas the Governor, Deputy Governor and
Vicegovernors of the Croatian National Bank, appointed pursuant to these acts,
will continue to perform their duties until the expiry of their terms of office.
The Croatian Parliament will be obliged to appoint the remaining two
Vicegovernors no later than 30 days after the date of accession of the Republic
of Croatia to the European Union.
On the date of the introduction of the euro as the official currency of the
Republic of Croatia, the CNB will transfer to the ECB its powers regarding the
conduct of monetary policy and foreign exchange operations, management of the
foreign reserves and the functioning of the payment system. The CNB Governor
will become a member of the Governing Council of the ECB. The CNB will remain
autonomous and independent in the decision-making and carrying out of the
remaining tasks. As an integral part of the ESCB, the Croatian central bank will
participate in the definition and implementation of monetary and foreign
exchange policies and in the exercise of monetary control. The CNB will manage
the non-transferred portion of foreign reserves in accordance with the
guidelines of the ECB. The issuance of banknotes and coins will be conducted in
accordance with the Statute of the ESCB and the ECB and the decisions of the
ECB. The annual financial statements of the Croatian National Bank will include
the portion of monetary income of the ESCB and ECB allocated to the Croatian
National Bank by the ECB in accordance with the Statute of the ESCB and the ECB
and accrued in the implementation of the common monetary policy.
| REFERENCES: |
| Former Governors of the CNB |
| Annual
Report Long time serie: Monetary Authoriries Accounts, xls Methodology |
| Financial Statements of the CNB |
| The Law on the CNB |