ZAGREB, June 15, 2019 – Croatian National Bank (HNB) governor Boris Vujčić said on Saturday he expected to do very well in the Asset Quality Review before entering the Single Supervisory Mechanism (SSM) because their capital adequacy and liquidity was markedly above the euro area average and they left no doubt that the system was good and stable.
Speaking at the 25th Dubrovnik Economic Conference, he said the technical part of conducting the review was being arranged with the European Central Bank.
He said the names of the banks which would be reviewed should be known by the end of the month, after which the banks will be notified which data they need to prepare and the ECB has to invite applications for conducting the review.
Vujčić said a letter of intent for joining the European Exchange Rate Mechanism II was nearing completion and that it would be sent after an agreement with European partners. He would not speculate on dates but said it would happen “very soon”.
The HNB said on May 27 that Croatia had sent a request to the ECB for establishing close cooperation in the oversight of credit institutions as part of the SSM.
The step is part of the procedure for Croatia’s entry to the ERM II and then the euro area, the HNB said, adding that Croatia plans to enter the mechanism of close cooperation with the ECB and the ERM II at the same time.
The SSM is the first pillar of the banking union and it comprises the ECB and the national authorities of the participating. Participation is automatic for euro area member states and voluntary for those outside, which have to establish close cooperation with the ECB.
The SSM’s main goals are to provide for the security and reliability of the European banking system and to contribute to financial integration and stability in the EU. Establishing close cooperation is a prerequisite for participating in the SSM, in which the ECB oversees credit institutions in the euro area.
More news about the introduction of euro can be found in the Business section.
