CROATIAN NATIONAL BANK
PRESS RELEASE, November 8, 2000
LOWER RESERVE REQUIREMENT - HIGHER INVESTMENT IN CNB BILLS
At the meeting held on Wednesday, November 8 2000, the Council of the Croatian National Bank, chaired by Governor dr. Zeljko Rohatinski, agreed CNB's report on economic and monetary developments in the first half of the year to be submitted to the Croatian Parliament and reviewed recent economic and monetary indicators. The Council paid special attention to indicators of relatively high growth of monetary aggregates in 2000, high liquidity of the banking system and low real interest rates, which are not followed by a desired pace of economic revival, lending to real sector and growth of employment. This obviously points to limited potential of monetary policy in enhancing economic growth and reducing unemployment and indicates that a more relaxed monetary policy stance cannot substitute for other measures necessary for the stimulation of investments and structural adjustments, relieving of economy's tax burden and enabling more efficient functioning of the law governed state.
In the described circumstances, the first step was made today in the implementation of the September decision on unification of reserve requirements on kuna and foreign exchange deposits. The implementation resulted in about 370 million kuna freed up on accounts of Croatian banks. Since the amount was freed up precisely in conditions of high liquidity of the banking system, also at the time when about 150 million kuna of previously subscribed central bank bills came due, the Croatian National Bank assessed that a part of the freed up amount should be sterilized immediately. Banks invested about 460 million kuna in the central bank bills. It can be concluded from the aforementioned that the central bank made a significant step towards modernizing monetary policy instruments, without causing high extra liquidity, which could endanger stability of prices and exchange rate. Should it prove necessary, the central bank is ready to introduce additional measures to sterilize the excess liquidity.
At the Wednesday meeting, the Council of the Croatian National Bank approved the semi-annual report of the Institute for Domestic Payments. In addition, the Council relieved three members of Institute's management board of their duty and appointed Mr. Relja Martic and Mr. Cedo Maletic, CNB Vice-Governors, and Ms. Vesnu Vasicek, Head of Treasury in the Finance Ministry, for members of the board.
Further, the CNB Council decided on a number of requests for acquiring more than 10 percent of voting shares in banks and savings banks. Heruc d.d. was given approval for acquiring an additional 14.71 percent of voting shares in Centar banka d.d. Zagreb. Heruc will thus increase its stake in the bank to 48.8 percent; together with affiliated companies Heruc will hold a 66.8 percent stake in Centar banka. Privredna banka Zagreb was given approval for acquiring up to 100 percent of voting shares in Medjimurska banka d.d. Cakovec and Bank Austria AG Wien for purchasing 80 percent of voting shares in Bank Austria Creditanstalt Croatia d.d. Zagreb. Francesco Amadeo Maria Signorio from Luxembourg was approved purchase of 47 percent of voting shares (secondary issue) in Primorska stedionica d.d. Rijeka. Mr. Signorio thus increased his ownership stake in the total share capital of the savings bank to 31.98 percent. Together with the affiliated person Ms. Svitlana Bondareva, Mr. Signori will hold a 39.22 percent stake in Primorska stedionica.
At the Wednesday meeting the CNB Council approved the nominations of Mr. Sime Luketin for chairman of the management board of Credo banka d.d. Split, Mr. Vedran Kuis for chairman and Ms. Natasa Marendic and Mr. Nikola Samarzija for members of the management board of Croatia banka d.d. Zagreb. In addition, the Council approved the nominations of Mr. Kresimir Krile for member of the management board of Dubrovacka banka d.d. Dubrovnik, Mr. Anton Butorac for chairman of the management board of Kvarner banka d.d. Rijeka and Mr. Velimir Sonje for member of the management board of Raiffeisen banka d.d. Zagreb. The CNB Council further agreed with the nominations of Ms. Vera Radaš for chairwoman of the management board of Slatinska banka d.d. Slatina, Mr. Zlatko Muhvic-Pintar for chairman of the management board of Trgovacka stedionica d.d. Zagreb and Mr. Tomica Pustisek and Mr. Damir Odak for members of the management board of Zagrebacka banka d.d. Zagreb.