"A developed and diversified financial system is crucial for sustainable economic growth, stability and resilience to shocks, because it stimulates capital accumulation and technological progress by increasing the saving ratio, enables the mobilisation and aggregation of savings, facilitates the collection of information on investment opportunities, stimulates foreign capital inflows and contributes to the optimal allocation of capital. Countries with more developed financial systems tend to grow faster over long periods of time, and a large body of evidence suggests that this effect is causal: financial development is not just a consequence of economic growth, it contributes to that growth," said Governor Boris Vujčić at the Croatian-Slovenian forum of Jutarnji list and Delo "Capital Markets 2024", which took place today in Zagreb.

Regarding the financial systems of Croatia and Slovenia, he said that they were smaller and more bank-centric compared to the euro area average, and the financial assets of the two countries significantly lower than the euro area average. "The allocation of financial assets of Croatian and Slovenian households is mainly to deposits and real estate, where the share of deposits in the financial assets of these households is higher than the euro area average," the Governor stressed, adding that Croatia and Slovenia had a lower participation of households in financial investments, which in his opinion should change.

The underdeveloped financial system in Croatia is also reflected in the structure of corporate financing sources, with enterprises increasingly relying on internal financing and financing from suppliers, while financial institutions have a low share in total corporate financial liabilities.

"On the other hand, citizens of Croatia and Slovenia, according to Eurobarometer data, have invested the most in crypto assets in the last two years in the EU, which in turn raises the issue of financial literacy. Financial literacy is above the EU average in both Slovenia and Croatia, the evaluation of financial behaviour in Slovenia and Croatia is among the highest in the EU, but financial knowledge in Croatia, however, lags behind that of Slovenia, as well as the EU average," said the Governor at the end of his presentation.