At its meeting held on Wednesday, November 4, 1998, the Council of the Croatian National Bank, chaired by Governor Dr. Marko Škreb, reviewed recent economic and monetary developments, granted an operating licence to another Croatian building society founded by 25 commercial banks and decided to initiate the appraisal of the feasibility of Ilirija Banka's rehabilitation. In addition, the Council of the CNB approved several nominations for chairmen and members of management boards of Croatian banks and savings banks, and made a number of other decisions, acting in accordance with its authorities.
According to available indicators, economic activity continued its growth in October, although at a slower pace. The stability of prices was satisfactory - retail prices in October were by 0.5 percent higher than in September and by 6.1 percent higher than in October 1997. In the first ten months of 1998 retail prices were by 5.7 percent higher than in the same period last year. Afer a period marked by significant depreciation of the kuna against the Deutschmark (in September the Deutschmark reached the highest value against the kuna since February 1994) and by abundant interventions of the CNB in the foreign exchange market, the exchange rate of the kuna stabilized within the narrow band. Interest rates on the Money Market grew recently due to a high demand for kuna, but September data indicate that lending rates of commercial banks continued trending downwards. Taking this into consideration, the Croatian National Bank believes that changes in monetary policy or additional monetary measures are not required.
The decision of the CNB Council to initiate the appraisal of the feasibility of Ilirija Banka's rehabilitation was reached on the basis of the decision made by the Commercial Court in Zagreb. The Court, namely, having considered the proposal of the CNB as Ilirija Bank's creditor to initiate bankrupcy proceedings against the bank, obliged Ilirija Banka to submit to the CNB the request for the appraisal of the feasibility of this bank's rehabilitation within 8 days. Ilirija Banka submitted the mentioned request along with a rehabilitation and restructuring program. The Croatian National Bank will appraise the program and other relevant records by applying the legally prescribed procedure.
As many as 25 commercial banks, headed by Varaždinska Banka, founded the third building society to operate in Croatia. The society will be registered as Hrvatska stambena štedionica d.d. and will be headquartered in Varaždin. The Council of the CNB granted an operating licence to this building society and approved the nominations of Mr. Mirko Brozović for chairman and Mr. Dražen Klarić for member of its management board. Furher, the Council of the CNB agreed with the nomination of Ms. Marija Šola for chairman of the management board of Partner Banka d.d. Zagreb, Mr. Zvonimir Jurjević for member of the management board of Zagrebačka Banka d.d. Zagreb and Mr. Anton Belušić for member of the management board of Istarska Kreditna Banka d.d. Umag. In ddition, the Council of the CNB gave its approval for the nomination of Mr. Jakov Krešić for member of the management board of Cibalae Banka d.d. Vinkovci and Ms. Vlasta Zaninović for member of the mamagement board of the savings bank Sonic d.d. Zagreb.
At the Wednesday meeting, members of the CNB Council were informed that Grandinvest Corporation L.B.C., which filed a request to the CNB to be given approval for the purchase of more than 10 percent of Glumina Banka's voting shares, had not supplied records on the basis of which such approval could be granted, although the Croatian central bank urged the company to submit these records. Thus, it was concluded that the above request cannot be reviewed and was refused as such.
The Council of the CNB decided on the issue of a commemorative series of kuna and lipa coins dated 1998, as well as on the issue of commemorative 200 kuna silver coins dedicated to a famous Croatian writer Ivana Brlić-Mažuranić. In addition, the Council of the CNB approved the plan related to the issue of 25 kuna legal tender commemorative coins in 1999 to mark the introduction of euro as the single European currency. Traditional issue of collections of all nominations of kuna coins dated current year of issue will also continue. The mint "IKOM" was given approval for minting of gold medal "100 Donations " dedicated to activities of the Croatian Red Cross.