Managing Systemic Risks in the Croatian Economy

10 Pages Posted: 5 Oct 2016

See all articles by Boris Vujčić

Boris Vujčić

Croatian National Bank; University of Zagreb - Faculty of Business and Economics

Mirna Dumicic

Croatian National Bank

Date Written: September 2016

Abstract

The recent world financial and economic crisis revealed the need for a macroprudential approach to financial system analysis, since it has become obvious that a significant share of risks arises from the system itself, independently of the risks related to individual financial institutions. The previous regulatory framework has shown to be pro-cyclical, which, combined with liberalised financial systems and technological advancement, increased the speed and the intensity of shock propagation. Real output costs of extreme financial crises amount from 3% to 5% of world GDP (Kapp and Vega (2012)), while the social costs considerably exceed those amounts. All of this emphasises the necessity of identifying and monitoring systemic risks in order to better understand the processes of their accumulation and enable the preventive reaction of policy makers, which was partly missing in the “standard” supervision framework.

Full publication: Macroprudential Policy

Suggested Citation

Vujčić, Boris and Dumicic, Mirna, Managing Systemic Risks in the Croatian Economy (September 2016). BIS Paper No. 86l, Available at SSRN: https://ssrn.com/abstract=2844269

Boris Vujčić (Contact Author)

Croatian National Bank ( email )

Croatia

University of Zagreb - Faculty of Business and Economics

Trg maršala Tita 14
Zagreb
Croatia

Mirna Dumicic

Croatian National Bank ( email )

Croatia

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