Zagreb - Amendments to laws on the resolution and compulsory liquidation of credit institutions aim to speed up the response of authorities during bank resolution by limiting the need for prior approval from the Finance Ministry, State Secretary Matej Bule told parliament on Thursday.
Under the current framework, the central bank (HNB) and the HANFA financial services supervisory agency must obtain ministry approval before adopting decisions with direct fiscal or systemic implications.
“Given the time constraints in any crisis situation, we conclude that ministry approval should only be required in cases where measures deviate from those set out in the resolution plan,” Bule said.
Opposition MP Ante Kujundžić of Bridge said the ministry should have a stronger role in the resolution process than envisaged by the bill.
The amendments also introduce a category of non-preferred unsecured debt instruments in the liquidation of credit institutions, while maintaining the existing order of creditor payouts in the event of a bank failure. Claims by employees would remain first in line, followed by HNB and HANFA, then insured deposits held by households, and subsequently those of micro, small and medium-sized enterprises.
The changes have also received opposition backing. Boris Lalovac of the SDP recalled bank failures during the global financial crisis in the late 2000s. “At that time, many European countries had to rescue financial institutions, leading to a sharp rise in public debt relative to GDP. The EU then established that bank losses should no longer be covered by public funds, but by creditors and shareholders, with the state as a last resort.”
Ruling HDZ MP Josip Ostrogović said the amendments would leave the state better prepared for future crises. “Past financial crises, at European and global level, have shown how costly an unregulated system, unclear rules and delayed decisions can be. The costs of such disorder were borne by citizens and the economy.”