Tamara Perko: A Stable and Liquid Banking System is Ready to Provide Strong Support in Accelerating Economic Growth

We live in an uncertain period in which we have had the opportunity to see how external shocks and various crises operate in a short time, but more importantly, we have also seen the strength of the economy that has shown readiness to adapt to unfavorable macroeconomic conditions. Banks are one of the key factors of stability in every economy as they must be ready and able to finance citizens and companies and support quality investment programs, this is the message from Tamara Perko, director of the Croatian Banking Association (HUB), who will discuss this topic in much more detail at the Regional Financial Forum, which gathers representatives of banks and creators of financial and monetary policy, taking place on April 20 and 21 in Opatija organized by Lider.

The banking system is liquid

– In Croatia, the banking system is highly liquid, and with the entry into the euro area, liquidity has further increased, which has directly affected the milder growth of interest rates compared to other countries. Under the pressure of news about changes in energy prices, inflation, the war in Ukraine, and fears of recession, it is not easy to notice or believe that Croatia has received a historic opportunity for a significant developmental leap because, in addition to entering the euro area, Croatia has also become a new member of the Schengen zone, the largest area of free movement of goods and people in the world. The key to long-term and significant acceleration of economic growth lies in the hands of economic policy makers and entrepreneurs, and a stable and liquid banking system is ready to provide strong support in this process – this is the main message that will be sent by Tamara Perko at the speakers’ event in Opatija.

At the Forum, Governor Boris Vujčić will also speak, and the core of his presentation will be inflation. According to his predictions, the fight against inflation is not yet over.

– Core inflation is still at too high levels in most euro area countries, and it is questionable to what extent the decline in energy and raw material prices will “spill over” to core inflation, especially under conditions where strong growth in nominal wages may further complicate the “cooling” of core inflation – believes Governor Vujčić.

One of the keynote speakers at the Forum will also be Damir Odak, a member of the Audit Board of the European Central Bank (ECB), banker, and former Croatian deputy governor, who will present on the causes of rising inflation in the eurozone as well as the increased risk of recession during the period of disinflation.

– While this episode of inflation is mainly initiated by external shocks caused by the policies of other countries, primarily the policies of the USA, the monetary policy of the eurozone has created conditions for its entrenchment. Consequently, the eurozone had the highest inflation in 2022 compared to other major economies. In the period from 1950 to today, in all periods of disinflation in the USA, the UK, Canada, and Germany, a total of 17, there were also recessions. Although this does not mean that the measures needed to reduce inflation will inevitably cause a recession during this or next year, it certainly means that the risks of recession in the eurozone are increased during this period – emphasized Odak for Lider, although he will analyze this topic in much more detail at the Forum in Opatija.

Other topics of this year’s Forum are focused on the economic prospects of the region. Bankers and other stakeholders in the financial industry will address the analysis of interest rate movements in conditions of rising inflation and the likely recession, the impact of inflation on the credit portfolio and interest rates, measures to adjust the interest rate management strategy in new circumstances, and maintaining liquidity and stability. Banks face the question of how to support the development of small and medium-sized enterprises during rising interest rates and what innovative services and products they can offer, so this will also be discussed, and one of the topics will be sustainable investments and corresponding lending. The role of banks in economic challenges will not be overlooked.

The Forum will also feature Ante Žigman, chairman of the Management Board of HANFA, Ana Zorić, director of the Directorate for Economy and Financial System at the Ministry of Finance, and Stanislava Zadravec Caprirolo, director of the Association of Banks of Slovenia.

The Forum is intended for creators of financial and monetary policy, banks, funds, and representatives of the financial sector, representatives of international financial institutions, and registration can be done here. The Forum is a natural continuation of Lider’s long-standing conference, the Meeting of Governors and Bankers of the Region, which has been held every year in Rovinj organized by Lider weekly.