In transition countries, the issue of how to manage a bank well is intertwined with the issue of rehabilitation. If I were the CEO of a bank in Croatia today, I might well have some sleepless nights. The CEO's who are getting the least sleep, I would guess, are those at the helm of the 3 banks under rehabilitation, as well as those who may be facing rehabilitation. And while these executives are not sleeping, they are causing unquiet nights for their colleagues in other banks. But the night is young, so let us tell the whole story from the beginning.
Bank failures are common world-wide.
We Americans probably boast the largest number of them, since we have the most banks anywhere. In comparison, the handful of Croatian banks under rehabilitation does not seem so extraordinary. While this list applies to transition countries, including Croatia, transition countries face specific problems. In developed market economies, there are good banks that can serve as models of banking practice. In transition countries, the issue of building up the skills to run a bank well is intertwined with the issue of rehabilitation.