UPPER HOUSE SUPPORTS SEVERAL BILLS

( Editorial: --> 2210 ) ZAGREB, Sept 22 (Hina) - The House of Counties on Tuesday supported a bill on banks, which is in the first reading. The bill envisages increases in the amount of founding capital, as well as the regulation of operating conditions and higher powers for the Croatian National Bank (HNB) in supervising and controlling the banking system, Finance Ministry representatives said presenting the bill. A new law on banks and US $590 million from the state budget should contribute to the elimination of irregularities in the banking system, which includes 61 banks and 27 savings banks. However, a number of opposition representatives warned of the excessive high powers the central bank would assume if the bill was adopted. The Croatian Peasants' Party (HSS) believes the bill to be "intolerably rigorous, limiting and partially penalising" without envisaging deeper reform. A Liberal Party (LS) MP said the bill was "an attempt at covert nationalisation of business banks and abolition of savings banks". The bill would mean that supervision of banks by the central bank would actually turn into management of those banks, the MPs said. A number of representatives, including a Croatian Democratic Union (HDZ) MP, opposed the abolishment of savings banks. The upper house also supported two legal texts confirming contracts with the Council of Europe fund for social development, which refer to reconstruction loans for eastern Slavonia. The loans, amounting to US $21 and 11 million, are intended for the health infrastructure and reconstruction of schools in eastern Slavonia. The repayment period is 15 years, with a five-year grace period and increased by the LIBOR interest rate of 0.5%. (hina) jn rml/sp 221605 MET sep 98