Economic Review, Vol. 58 No. 7-8, 2007.
Review article
THE ANALYSIS OF MODELS FOR FINANCING THE LONG TERM LOANS THROUGH THE CAPITAL MARKET IN CROATIA
Mladen Mirko Tepuš
Abstract
Croatian fi nancial system is dominated by banks with remarkable lack of long term funding sources which would enable long term financing. This paper makes proposals for possible development of actual long term fi nancing practice through a model which collects
funding sources at Croatian capital markets using the instruments of mortgage bonds and/or mortgage backed securities. Since a developed secondary long term loan (mortgage) market ensures many positive results while some loans (like home or car loans)
in Croatia have (or could have with simple adjustments) the needed characteristics and quality to form a mortgage pool, development of a model that collects funding sources for financing of long term loans through capital markets have been made as well as defining
the minimal standards that need to be set in line with best practice. Existing banks in Croatia could be authorized to issue mortgage bonds and/or mortgage backed securities at the beginning, while banks, housing savings banks, insurance companies, pension funds,
investment funds, international investors and others could be the investors. The proposed model for funding of long term loans could improve the current practice of long term financing in Croatia as well as initiate other positive monetary and economics results.
Keywords
loan; long term fi nancing; refinancing; mortgage pool; mortgage bond; mortgage backed security; covered bonds; primary and secondary loan market; securitization; Croatia
Hrčak ID:
14210
URI
Publication date:
16.7.2007.
Visits: 8.510 *