Professional paper
NATIONAL INTEREST RATE IN CROATIAN BANKING
Željko Deković
orcid.org/0000-0003-1795-388X
; Veleučilište u Šibeniku, Šibenik, Hrvatska
Abstract
Reasons for the frequent amendments to the Consumer Credit Act lie in unfavorable credit terms and especially unilateral changes in interest rates that have signifi cant adverse impact on the bank clients.
Therefore, it is necessary legislatively defi ne the conditions under which banks can change the variable interest rates, periods, procedures and parameters for changes in interest rates, with an obligation
to warn clients about the risks of volatility in interest rates. As Croatia has not had national benchmark interest rate until the application of the Consumer Credit Act, the Croatian Banking Association has developed a methodology for calculating national benchmark interest rate, as a
representation of the average cost of funding of the banking sector for a given currency. The author points out that the parameters that are defi ned as a national reference interest rates are generally
better adapted to the situation on the Croatian market and are less dependent on movements in the global markets. However, there remains an essential remark that the national reference rate is not
“right” reference rate, but only the rate that shows the average cost of bank fi nancing with constantly present servicing problem of loans in foreign currency clause in Swiss francs (CHF) at variable
interest rates.
Keywords
consumer credit; floating interest rate; reference interest rate; banks
Hrčak ID:
142299
URI
Publication date:
23.7.2015.
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