CRO LOWER HOUSE ENDS DISCUSSION ON BANKING SYSTEM

( Editorial: --> 8885 ) ZAGREB, June 4 (Hina) - The Croatian National Parliament Lower House on Thursday ended a discussion on the Report on the Situation in the Banking System. The Croatian National Bank's (HNB) governor Marko Skreb reiterated the stance that the Croatian banking system is basically healthy. MPs, however, pointed out the decline of citizens' trust in banks and the decrease in savings, and requested that responsibility for the case of Dubrovacka Banka be investigated. MPs also requested stricter control and supervision of the banking system. They supported the adoption of the new law on banks and stressed that companies' businesses and the selling of shares to banks had to be subject to bigger public scrutiny. The Croatian Democratic Union (HDZ) bench estimated the situation in the banking system as stable and that data on an increase of deposits and savings showed that citizens did have trust in banks. However, opposition parties in the Parliament held such estimates as unrealistic, assessing that "in a sick economy, there is no healthy banking". Announcements of a new law which would stipulate more strictness in control over banks received great support. Opposition benches and MPs described the HNB report as formal and defensive, used to relieve the HNB of responsibility for the cases of the Vukovarska, Dubrovacka and Istrarska banks, as well as similar cases in the future. They stated that the situation in banking was worse than stated in the report, the mistrust of citizens was increasing, and pointed out the connection between politics and banking. Vlado Gotovac of the Liberal Party (LS) said Croatia needed a radical revision of the banking system and functioning of the state. Damir Kajin of the Istrian Democratic Party (IDS) requested that banks announce the structure of ownership, companies of which they are co-owners and information about large credits as soon as possible. Dragica Zgrebec of the Social Democratic Party (SDP) requested that the HNB increase their scrutiny of banks. Marinko Filipovic of the Croatian Peasants' Party (HSS) estimated it was obvious that banks were services for tycoons and that "all privatisation dirt" was cleaned through them. Describing the situation in business banking as concerning, Ivan Herak of the Croatian Social Liberal Party (HSLS) said he did not believe in positive advances until the state and current authority dominated the economy. Director of the State Agency for Securing Savings and Rehabilitation of Banka, Mladen Sunjic, announced that suggestions on the increase of amounts for securing savings would be discussed. Djuro Njavro, HDZ, suggested an increase in the mandatory insurance of savings from the current 100,000 kuna to 360,000 kuna. (hina) lml rm 041939 MET jun 98