WORST PERIOD OF CRISIS IN BANKING SECTOR OVER - SKREB, JURKOVIC

ZAGREB, 7 July (Hina) - Croatian National Bank (HNB) Governor Marko Skreb and the head of the Croatian Institute for Banking and Insurance (HIBO), Pero Jurkovic, on Wednesday said they believed the worst period of a crisis in the Croatian banking system was over. The two officials stated this following a ceremony at which 13 HNB employees received certificates at the end of a basic course on central banking, organised by the HIBO. I believe that the financial sector will soon consolidate and that we will overcome the current unfavourable situation, Jurkovic said, adding there were already some indications that the sector would recover. The HIBO head believes Croatia's banking sector has a future, which was indicated by the expansion of the banking sector, possible engagement of foreign banks as co-owners of Croatian banks, and specialisation. HNB Governor Skreb reminded that Gross Domestic Product (GDP) had been falling for two quarters in a row (the last quarter of 1998 and the first in 1999), but there were indications of economic revival in the second half of 1999, primarily regarding developments in the area of import and in the growth of companies' and citizens' deposits. "All this indicates that we have passed the worst period as regards the macroeconimic situation and banking", Skreb said. He expected further growth of deposits in the sector of business banking. Skreb was also very satisfied with the new Law on Banks, which envisages stricter control of banks by the central financial institution. "... in the first six months we have carried out as many as 30 direct inspections and issued instructions to 15 banks on how to run business", he said. Jurkovic and Skreb described today's ceremony as very important, considering the fact that Croatia lacked banking personnel. The world of finances is developing rapidly and permanent training and specialisation are the only possible response to the challenges of the future, Skreb said. (hina) rml