BANKING CRISES COST CROATIA ABOUT US5.5 BILLION -- SKREB

ZAGREB, April 18 (Hina) - The Croatian National Sabor's House of Representatives on Tuesday continued its third session by a discussion on a report of the Croatian National Bank (HNB) for 1998 and the first six months of 1999. Croatia's banking in the past several years had many problems, however, almost all countries in transition, just like Croatia, went through two banking crises, HNB governor Marko Skreb said. The first crisis, called the crisis of old banks, took place at the beginning of the transition process due to debts from the old economic system. The second crisis, however, effected banks established after the change of the economic system, which did not manage to maintain solid due to poor management or the strengthening of the competition at the market, Skreb explained. The expenses of Croatia in the first banking crisis are estimated to US$4.6 billion, and the second crisis cost Croatia approximately US$800 million. The total expenses of banking crises in Croatia amount to about US$5.5 billion, which places Croatia within countries with the greatest expenses in the solving of banking crisis, the governor said. (hina) it