New CNB measures to stimulate credit growth: problems and solutions

Neven Vidaković and Dušan Zbašnik

MPRA Paper from University Library of Munich, Germany

Abstract: The paper analyses the new measure implemented by Croatian national bank (CNB). The measure is a decrease in the reserve requirement, but the actual release of funds is contingent on increase in lending to firms. This new measure is significant because for the first time in Croatia there is a measure whose purpose is to affect specifically credit policy of the banks. Although this new measure has good intentions it does not solve the problem of why highly liquid banking system in Croatia is not willing to increase lending. The reason for lack of credit growth lies in two separate problems. The first problem is the willingness of banks to have more credit risk and the second problem is the way monetary policy is conducted in Croatia.

Keywords: conduct of monetary policy; banks; credit (search for similar items in EconPapers)
JEL-codes: E51 E58 G21 (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-ban, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:54195

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