ZAGREB, Oct 12 (Hina) - Croatian National Bank (HNB) has initiated changes of the valid provision of the Croatian Constitution on the central bank, in order to achieve the full functional, institutional, financial and personnel
independence of the HNB. According to the HNB's proposal, the central bank will be responsible for the stability of prices and liquidity and solvency of the entire banking system. A change of the constitutional provision is very important for the elaboration of a new law on the central bank, a draft of which is likely to be sent from the HNB to the Government next week. Such a law is in accordance with standards and requirements of the European Union, and it is also a pre-condition for Croatia's coming closer to the EU. According to the current formulation in the Constitution, the HNB is responsible for the stability of the national currency and for general
ZAGREB, Oct 12 (Hina) - Croatian National Bank (HNB) has initiated
changes of the valid provision of the Croatian Constitution on the
central bank, in order to achieve the full functional,
institutional, financial and personnel independence of the HNB.
According to the HNB's proposal, the central bank will be
responsible for the stability of prices and liquidity and solvency
of the entire banking system.
A change of the constitutional provision is very important for the
elaboration of a new law on the central bank, a draft of which is
likely to be sent from the HNB to the Government next week.
Such a law is in accordance with standards and requirements of the
European Union, and it is also a pre-condition for Croatia's coming
closer to the EU.
According to the current formulation in the Constitution, the HNB
is responsible for the stability of the national currency and for
general liquidity for payments in the country and abroad, but this
leaves space for imprecise and broad interpretation.
According to the HNB, the central bank cannot be broadly liable for
some generally defined liquidity in the country. The real function
of the bank, however, is to maintain and promote liquidity and
solvency of the banking sector.
The proposed act envisages considerable changes in the
organisation and scopes of the activities inside the HNB.
The HNB Council will continue to be constituted from external
members and HNB representatives, but it will no longer carry out
regular daily jobs. Its task should be to create a monetary policy,
while the policy would be carried out by the Governor's Committee
made up by experts from the central bank.
The HNB should no longer grant direct credits to the state but it
would play a role of a state agent, which will make it possible for
the central bank to operate on open markets.
The central bank's financial acts would no longer be forwarded to
the national parliament for the confirmation and the bank's
management could no more be replaced owing to political changes.
(hina) jn ms