No signs of difficulties in PBZ or Splitska banka

Published: 15/4/2002

At the meeting of the chairmen of the five parliamentary parties held on April 9, 2002 on the issue of Riječka banka rumors were heard, originating from very doubtful sources, about difficulties and irregularities in the operations of certain banks.

In this respect the Croatian National Bank emphasizes that there are no valid indications of any such problems in the operations of Privredna banka Zagreb or Splitska banka. On the contrary, everything points to the fact that these banks operate in a successful and stable way. Consequently, any reference to these banks in a broader context of the recent developments concerning Riječka banka may cause a serious damage not only to these banks individually but to the whole banking system in Croatia.

All those who uncritically believe in such rumors or throw them open to the public unguardedly must be aware of the consequences. It is even worse if such "new scandals" are deliberately created in pursuit of some other goals, without taking into account possible effects this may have on the entire national interests.

Indeed, the Croatian National Bank will, as already announced, carry out additional examination of operations in all major banks, develop additional control mechanisms and do everything that is in its power to increase the responsibility of the internal and external control bodies in order to minimize the possibility of repeating the case of Riječka banka.

In this connection it is worth noting that a bank's losses are covered primarily by the bank's reserves and the shareholders´ capital. In more drastic cases that may result in a total loss of the shareholders´ property. If only because of this fact, the "Riječka banka case" is undoubtedly an important lesson to all bank owners, stimulating them to conduct additional examinations and strengthen their internal control mechanisms, even without any external request. This is certainly the best way to prevent possible malfeasance or "moral hazard" and to protect not only the shareholders´ capital but also the total assets that are deposited with and managed by such banks.