The financial system is a complex part of every country which governs its entire economic
operations. It is comprised of many different units which are often intertwined. Financial
institutions are a part of the financial system. They are companies that offer different financial
services to their users. They purchase financial claims from deficient spending units and sell them
with different characteristics to surplus spending units. Some of them include: commercial banks,
mutual funds, private pension funds, life insurance companies, money market funds, governmentsponsored
enterprises, government pension funds, finance companies, casualty insurance
companies, savings institutions and credit unions.
After the Croatian independence there has been a rapid development of the financial market and
financial institutions. However, the economic crisis which happened in 2007 affected Croatia as
well, and we have experienced a massive fall in liquidity and decline of the capital market.
Today we have many different financial institutions in Croatia, however, there are still many
areas which need improvements. The Croatian banking system is still dominant compared to the
private sector, and in the future we need to improve the efficiency of the capital market,
cooperation on the global and national level, remove restrictions and further adapt to EU
standards. Croatian financial institutions are regulated by the Croatian National Bank, the
Croatian Financial Services Supervisory Agency (HANFA) and the Ministry of Finance.