Introduction of Euro and its Implications for European and Croatian Financial System
Zdenko Prohaska, Ph.D.
In this paper the Euro and its implications for a European and Croatian financial system is examined. It is expected that after January 1, 1999 a single currency and greater capital mobility will lead to more competition among financial institutions , i.e. banks, insurance companies, investment funds, pension funds. This will result in further disintermediation, competition and consolidation in the financial sector in most European countries. To answer the question what impact this process will have on Croatia's financial system, a comparative analysis is done regarding the central bank system in Europe (ECB - European Central Bank in Frankfurt) and in Croatia. Following that, the banking system in several European countries is examined focusing especially on wholesale banking and retail banking and compared again with the Croatian banking system.
Key words: Euro; financial system; European Central Bank; banking system; Croatia; EMU; bank