Financial Crime World

Croatia’s Financial Institutions Face Tough Regulatory Requirements

In Croatia, financial institutions such as banks, savings banks, and housing savings banks operate under a regulatory framework that ensures their stability and security for depositors and investors. The Credit Institutions Act and Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms form the basis of this supervision.

Key Regulations

  • The Financial Conglomerates Act
  • The Credit Unions Act

These acts provide the Croatian National Bank (CNB) with the authority to issue guidelines and recommendations that govern the operations of financial institutions.

CNB’s Regulatory Powers

The CNB exercises its powers by adopting subordinate legislation in the form of: + Decisions + Instructions + Guidelines

These regulatory products are based on EU regulations and directives, as well as international standards.

CRD IV Package

One of the key pieces of legislation is the CRD IV package, which transposes Basel III rules into European law. The package consists of a regulation and a directive, both of which entered into force in 2014. The new rules will be phased-in between 2014 and 2019.

Regulations vs. Directives

  • Regulations are part of secondary law and are legally binding, directly applicable in all EU member states.
  • Interested parties can access these regulations on the EUR-lex website.

European Banking Authority (EBA)

The EBA also issues: + Technical standards + Guidelines + Recommendations + Opinions

These regulatory products cover areas such as: + Own funds + Recovery and resolution + Internal governance + Supervisory reporting

Guidelines

Guidelines are an important tool for explaining legal norms, providing guidance to supervised entities, and recommending good practices. These guidelines are based on international standards and take into account market conditions, legal norms in other countries, and recommendations by relevant supervisory bodies.

Implementation

The Credit Institutions Act and subordinate legislation adopted by the CNB have implemented Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.

Conclusion

Overall, Croatia’s financial institutions operate under a robust regulatory framework that ensures their stability and security for depositors and investors.