At its session today, the CNB Council reviewed current monetary and economic developments, as well as the latest views on the stability of and further movements in the financial system, and adopted a monetary policy projection for the rest of the year.
The CNB holds that, given a serious shortfall in budget revenues and autonomous government expenditure movements in a situation of deep economic recession, the strongest monetary pressures in the coming period will be generated by the needs to finance budget and balance of payments deficits. In this connection, the CNB continues to emphasize that its liquidity creation policy arises from overall economic and financial relationships, without threatening the price stability or exchange rate stability as a key anchor, and this represents an impediment to any form of monetary expansion.
Another fact to be borne in mind is that the central bank's room for manoeuvre is further limited, relative to that some months ago, by banks' reserves, accumulated in the previous years as a result of the application of monetary policy instruments, being largely channelled towards mitigating the effects of the crisis at end-2008 and early in 2009, based on the CNB's decisions. Consequently, there is no significant possibility of relaxation in this area either.
Under such circumstances, it should be noted that any further increases in budget deficit and government financial needs would lead to the crowding-out of other sectors from the sources of finance, accumulation of arrears and system illiquidity deepening. The CNB Council therefore emphasizes the urgency of a strong budget revision and a severe cut in expenditures, as any postponement of such measures would widen the gap between feasible revenues and the present public spending level. This would aggravate the problems and make their solution increasingly difficult, so that no monetary policy relaxation, either at present or in the future, would be capable of resolving them.
During the session, the CNB Council granted approvals to a group of connected persons and persons acting jointly for the acquisition of more than 50 percent, to GIP Pionir d.o.o., Zagreb for the acquisition of more than 20 percent, and to Paron d.o.o., Zagreb for the acquisition of more than 10 percent of interest in initial capital of Nova banka d.d., Zagreb. There will also be changes in the ownership structure of A štedna banka malog poduzetništva, in which four connected natural persons (the Crnčević family) and three legal persons connected with them (Spectator Grupa d.o.o., Spectator Solis d.o.o. and Spectator Avanti d.o.o.) acquire more than 50 percent of interest in initial capital of this savings bank.
The Council also approved the appointments as chairpersons and members of the management boards of several financial institutions. Specifically, Ivan Krolo was reappointed as a management board member of Banka Splitsko-dalmatinska d.d., Split; Christian Pettinger was appointed as a management board member of BKS Bank d.d., Rijeka; Klaudija Paljuh was appointed as a management board member of Istarska kreditna banka Umag d.d., Umag; Damir Odak was reappointed as chairman, and Zorislav Vidović and Balasz Bekeffy as members of the management board of OTP banka Hrvatska d.d., Zadar. Jasna Mamić assumed the position as chairperson and Fernando Zavatarelli as a member of the management board of Veneto banka d.d., Zagreb. Daniela Roguljić Novak and Mario Agostini were appointed as management board members of Zagrebačka banka d.d. Zagreb, and Ivan Ostojić remained as a management board member of Wüstenrot stambena štedionica d.d., Zagreb.
