Banking Sector Problems: Causes, Solutions and Consequences

This paper reveals that the fundamental cause of the new bank crisis was the inappropriate credit policies of the commercial banks, exacerbated by various external shocks. The central bank began to intervene very quickly but only after the bank crisis occurred. Although many banks failed, it is not possible to speak about the end of the banking crisis. There are still many internal weaknesses in bank operations entwined with currency and credit risks, bank investment in enterprise shares, the maturity-gapping of assets and liabilities and the discrepancy between the information about banks and the possibilities for complying with regulations.

Provided by: Croatian National Bank Topic: Software Date Added: Mar 2000 Format: PDF

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